When can an employee’s paycheck be docked

Date: 2006
Author: Daniel A. Lublin
Publication: Metro
Blamed for stealing over $1,300 in cash from his till, lifelong bartender and cashier, Mark Hall, was immediately shown the door. Sadly, with only enough money left to pay his rent, Hall was totally dependant on his final paycheck just to get by. But when Hall’s employer docked his pay for the missing funds, surprisingly it was Hall who had the last laugh. As Hall’s employer learned, docking a former employee’s paycheck can be more than just costly, it can be illegal.
Hall worked as a bartender in Haliburton, Ontario. He was fired after his employer discovered a shortfall of over $1,300 from two busy shifts that he had worked. Hall eagerly awaited his final paycheck but much to his dismay, it came up short too; to the tune of the $1,300 his employer claimed he had taken.
Hall denied responsibility for the shortfall and started an investigation with the Ministry of Labour. He argued that other people had access to the cash on the dates in question and further, when he had counted the money at the night’s end, everything had balanced out fine. like all good stories, however, there is always a twist. As it turns out Hall had signed an employee agreement form when he started work that stated if a shortage of funds occurs, his employer was authorized to deduct the shortage in full from his next pay. As a result, Hall’s employer argued that he had consented to the deduction. But what Hall’s employer didn’t know was that the law limits employers to very few opportunities to make deductions or withhold pay from a final paycheck. The Ministry of Labour determined that, despite having signed the agreement, it was illegal to deduct the missing funds because Hall wasn’t the only employee with access to the till.
While docking an employee’s paycheck seems tempting to many employers and infuriating to many employees, it is permitted only in limited circumstances. Therefore, I offer the following advice so both parties will understand and comply with the law:

  • An employer must obtain an employee’s specific and clear written authorization to make a deduction from his or her last paycheck;
  • The written authorization must refer to the specific amount or at the least provide a formula so a specific amount can be calculated;
  • Despite a valid written authorization, however, an employer can never deduct or withhold pay because of faulty work, a cash shortage and where there is lost or stolen property, if a person other than the employee in question had access to that cash or property.

As the case of Mark Hall shows us, when it comes to docking an employee’s paycheck for missing money, it really does pay to know to the law.