Pay claims

employment law salaries

Employment law advice about pay claims

Employment law prohibits deductions from salaries unless the worker specifically authorises it in advance and in writing using section 13 of the Employment Rights Act 1996. This is so even if the money is owed to the employer by the worker. Furthermore, despite the fact that an employer may have no work available, they are still obligated to continue to pay employees who are willing to work.

Employees should receive pay if they are sick or away on parental leave. This pay, though, may be less than normal depending on the contract. Employment law ensures that, generally, employees are entitled to the legal minimum statutory sick pay.

Salaries and bonuses

Employment law states that bonuses that are not part of the contract are regarded as salaries when they are paid. The best employment lawyers would advise that discretionary bonuses are complicated and depends on the bonus scheme. Nonetheless, these bonuses are treated as pay once the employer has awarded them. The employer is vulnerable to an employment tribunal claim if they seek impose a condition after the award is made and then seeks to claw the money back.

To challenge the employer, the employee would need to show that the bonus is discrete, identifiable and perhaps based on a formula.

A wage or salary does not include an advance of pay, money borrowed from the company, company expenses and payments made for a pension scheme or retirement. Disputes regarding these types of payments come under breach of contract. Most of these claims can also be brought at an employment tribunal.

For employees working in a restaurant, tips from customers do not count as salaries subject to the National Minimum Wage. But the same tips are part of salaries when it comes to unlawful deductions. So, unless it is part of the employment contract or agreed in writing, the restaurant owner cannot make deductions from tips.

Legal salary deductions

There are a number of circumstances where an employer can make deductions from an employee’s pay. Employment law gives employers the right to claim back money that was overpaid. Employers should contact the employee when they are aware of the mistake. If the overpayment was a long time ago then the employer needs to be flexible, fair and agree a repayment plan. If the employee disagrees with the deduction and discussion with the employer has not resolved this, then a claim can be made at the employment tribunal by the employee.

Deductions for tax and national insurance are legal requirements. Furthermore, a clause in the employment contract can allow for deductions that cover union dues or payments to a pension scheme. Other deductions will have to be agreed in writing before they are carried out. These could include, industrial action or a court order.

Shop workers

Special rules apply to shop workers involved in cash shortages or missing stock. If an employer decides a deduction should be made, he or she must write to the employee giving details of the deduction. The deduction should be made within 12 months of the discovery of the shortage. The employer can only take a maximum of 10% of the weekly or monthly gross pay.

Maternity leave pay

Employment law solicitors recognise that the law seeks to protect employees who are pregnant or on maternity leave from unfair treatment and dismissal.

If a pregnant employee or an employee on maternity leave is dismissed, the employer is required to put the reason in writing. If the reason is weak, the employee should consider whether the real reason was unfair dismissal or discrimination due to pregnancy. The best employment law solicitors would advise employee that they should first raise any issues with a manager on an informal basis.

Employment law also provides rights to parents. Women who are categorised as employees have the right to take 52 weeks maternity leave if they are having a baby. This right begins on the first day of working for an employee. Between two and four weeks of maternity leave is compulsory and a woman employee can then decide how much of the rest of the 52 weeks is taken. There are no more rights a pregnant employee or mother has if she is caring for more than one child at the same time.

Pregnant employees can be entitled to maternity pay. The types of pay are:

  • – Statutory Maternity Pay (SMP)
  • – enhanced (‘contractual’) maternity pay
  • – Maternity Allowance.

Employment law in 2022 states that employees are eligible for SMP if they have been continually working for 26 weeks for the same employer and earn at least an average of £123 a week for eight weeks.

SMP is paid for 39 weeks and an employee can receive 90% of their pay for the first six weeks. For the following 33 weeks, an employee receives either £156.66 or 90% of pay, whichever is lower.

The last 13 weeks of the 52 weeks is unpaid. Some employees offer enhanced maternity pay that is more than SMP if this is set out in the employment contract.