I would like to ask if companies can made deduction from staff salary in regards to :
1) Mistakes that resulted a financial loss to the company
2) Non-recovery of debt due to sales made by staff.
Can the company recover a % or in full of such deduction if it is allowed under the Employment Act?
Company can deduct salary for the followings under the Employment Act:
1) Absence from work.
2) Damage to or loss of goods entrusted to an employee for his custody, or for loss of money which an employee is accountable for, where the damage or loss is directly attributable to his neglect or default. This is to be determined by an inquiry to be held by the employer. No deductions shall be made unless the employee has been given an opportunity to explain the cause of the damage or loss and his reasons why the deductions should not be made.
3) For cost of meals supplied by the employer at the request of the employee
4) For house accommodation or for amenities and services supplied by the employer and accepted by the employee.
5) For the recovery of advances, loans or adjustment of overpayments of salary.
6) For income tax payment.
7) For CPF contributions.
8) For contributions to superannuation scheme or provident fund or any other scheme at the request of the employee in writing.
9) For payments to any registered co-operative society with the written consent of the employee.
10) For any other purpose which may be approved upon application from time to time by the Minister for Manpower.
In general, the maximum deduction amount in respect for any one salary period is 50% of the total salary, except:
(i)Absence from work;
(ii)Payment of income tax;
(iii)Recovery of advances/loans; and
(iv) Payments with the consent of the employee, to registered co-operative society in respect of subscriptions, entrance fees, installment of loans, interest and other dues payable.
Although the Employment Act may not allow you to recover for the financial loss & the non-recovery of debt, you may want to check against the clause of his Employment Letter in the recovery of the loss through legal means. Also, you shall record the incidents to assess and monitor the staff’s performance and manage him accordingly. In which, please note to the importance to meet the employee to let the latter aware of the action(s) your company may take. Do record the meeting session for future referencing.
