Salary deduction warning for South Africans

While there are certain cases where employers are allowed to make deductions from their employees’ salaries, this is generally against the law, and workers should ensure that their pay isn’t being docked unfairly.

Nedbank recently explained that South African labour law protects employees from an employer making arbitrary salary deductions.

“If you’ve ever been told your salary will be docked because of a till shortage, a broken piece of equipment, or a mistake with a customer order, you’d be right to ask if your employer can legally do this,” Nedbank said.

“The short answer is no – at least, not without following the correct procedures and adhering to strict rules.”

Nedbank explained that employers can only deduct money from your salary under certain circumstances.

This could happen in the case of legal obligations, where employers are required to make deductions like pay-as-you-earn income tax (PAYE), Unemployment Insurance Fund (UIF) contributions, or court-ordered garnishments.

Importantly, these deductions must appear on your payslip.

Salary deductions may also be made after disciplinary proceedings.

“If your employer believes you caused a loss or damage, they must follow proper disciplinary procedures to prove negligence,” the bank noted.

“If there’s been damage, a till shortage, or a loss – for example, comped meals or incorrect pricing – and the disciplinary procedure finds you liable, your employer must still get your written consent to make any deductions.”

Employers can also reclaim money if they accidentally overpay you – “but again, only with your consent or through a legal process”.

Section 34 of the Basic Conditions of Employment Act states that employers can deduct money from an employee’s pay for damage or loss only in certain circumstances.

Firstly, the employer must have followed a fair procedure and given the employee a chance to show why the deduction should not be made.

In addition, the employee must agree in writing, and the total deduction must not exceed the actual loss or damage or 25% of the employee’s net pay.

“If you won’t voluntarily give your employer permission to deduct money for loss, damage or overpayment, even after fair disciplinary procedures, your employer can apply for a garnishment order in court,” Nedbank explained.

“A garnishment order, or an emolument attachment order, is not the same as an employer deduction. It’s a court instruction that requires your employer to withhold a portion of your wages to repay a debt you owe your employer or any third party.”

These orders must be approved and issued by a court after proper legal proceedings, the bank said.

Importantly, the employee must receive notice of the application for the order and an opportunity to oppose its granting.

Under these orders, deductions must also be limited to a portion of the worker’s salary and cannot prevent them from meeting basic living expenses.

“Usually, no more than 25% of your salary can be garnished,” Nedbank said.

If the order is granted, the court will inform the employee and the employer before the deductions start.

In cases where the employee believes that a certain deduction is unfair or illegal, Nedabnk advised that there are certain steps they should follow.

As a starting point, they should approach their employer or human resources manager to explain the deduction and see if it can be resolved informally.

“Document these meetings and keep as much of the communication in writing as possible in case you need to take the matter further,” the bank advised.

“If you can’t resolve the issue internally, file a case with the Commission for Conciliation, Mediation and Arbitration. Tell them the full story and provide as much evidence as possible to support your case.”

If those steps don’t work, employees can consider legal action, Nedbank added.

“For more serious issues, you can approach the Labour Court to enforce your rights. The Department of Employment and Labour will also investigate an illegal deduction and can help you recover your money,” the bank said.

“Your salary is your livelihood, and the law is clear that employers must follow the right processes before making salary deductions. You have the right to be treated fairly and know why any money is being deducted from your salary.”