Paycheck Deductions | DrumhellerMail
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Last updateTue, 23 Jul 2019 1pm

Paycheck Deductions

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Dear Working Wise:

 

Can I deduct cash shortages from employee paychecks? The staff at my convenience store are cashiers. They count their floats before they start work and count their floats at the end of their shift. Since they are responsible for the money, can I recover the cash “lost” during their shifts via paycheck deductions? 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. For example, you cannot take deductions for faulty workmanship—restaurants can not charge employees for the dishes they accidentally drop.

 

Section 12 of the Code also states that an employer cannot make 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 other employees, accounting staff, supervisors or managers (including you). It may be difficult to actually find a time when only one employee 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.

 

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 four per cent of employees were caught stealing in 2008 according to the 21st Annual Retail Theft Survey conducted by Jack L. Hayes International. The survey included 22 major U.S. retailers employing a total of more than 2.1 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.

 

To review the Employment Standards Code, please visit our website at http://employment.alberta.ca/es.

 

Do you have a work-related question? Send your questions to Working Wise, at charles.strachey@gov.ab.ca. Charles Strachey is a regional manager with Alberta Employment and Immigration. This column is provided for general information.

 


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