Dear Working Wise:
Can I deduct cash shortages from employee pay cheques? The staff at my store are cashiers. They count their floats before they start work and at the end of their shifts. Since they are responsible for the money, can I recover the cash “lost” during their shifts? Signed, Missing Cash
Dear Missing Cash:
Alberta’s Employment Standards Code allows certain deductions to be made from employee earnings: Income Tax, Canada Pension Plan, Employment Insurance and Alberta Health Care premiums, as well as deductions resulting from a court judgment or order.
If you want to make other deductions from your employee’s pay, you must get written permission from the employee. Examples could include company pension plans, dental plans, personal charges to company credit cards, and so on. Usually these deductions are discussed and permissions are provided before the employee starts their job.
There are some deductions that are not allowed even with written authorization from the employee.
Employers can not take deductions for faulty workmanship. Faulty workmanship can include things like accidental damage to an employer’s equipment, a “walkout” in a bar, a gas station “pump & dash”, broken dishes in a restaurant or mistakes in production.
Alberta Employment Standards also prohibits employers from taking deductions from an employee’s earnings for cash shortages or lost property if any individual other than the employee had access to the cash or property.
This could include customers, other employees, accounting staff, supervisors or managers (including you). It may be difficult to find a time when only one person has exclusive access to cash or property.
The only way you can deduct cash shortages from an employee’s pay is if:
· You can show that they were the only person with access to the cash; and
· The employee gives you written authorization prior to the deduction.
Alberta Human Services offers an easy-to-use Employment Standards Tool Kit for Employers that can help you understand your rights and obligations under Employment Standards (ES) legislation. The tool kit is available at
Cash shortages could indicate some other issues that might require further investigation.
Your staff may need more cash-handling training and experience or they might be making mistakes because they are too busy. Talk to your staff about the reasons for cash shortages. You may need to step in a take a more active role in ensuring your staff have the proper skills.
You could also be experiencing theft in your workplace. Employee theft accounts for around one-third of all retail theft in Canada.
Most employees are honest, though, and deserve your trust. Less than three per cent of employees were caught stealing in 2011 according to the 24th Annual Retail Theft Survey conducted by Jack L. Hayes International. The survey included 24 major U.S. retailers employing a total of more than 2.8 million staff.
Talk to your employees and establish a zero-tolerance policy to theft. You might want to monitor things more closely. Perform reference checks before you hire. Ask your senior employees keep an eye out for problems. Install surveillance cameras. If the losses are linked to a specific employee, you might want to involve the police.
Do you have a work-related question? Send your questions to Working Wise, at email@example.com. Charles Strachey is a manager with Alberta Human Services. This column is provided for general information.