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Unlawful Wage Deductions

If your employer has deducted money from your wages, paid you with something other than money or unreasonably requires you to spend part of your wages in a particular way, you may have grounds to file a complaint of unlawful payment of wages or an unlawful wage deduction.

Wages must be paid in money. They must not be paid in goods or services. For example, a baker cannot pay his staff in bread.

Wages must be paid in cash, by cheque or money order, Electronic Funds Transfer (EFT) or a method authorised under your modern award or enterprise agreement. If an applicable modern award or enterprise agreement specifies a particular payment method, your employer must pay your wages by that method.

Wages must be paid in full on a regular weekly, fortnightly or monthly basis.

Your employer may make a deduction from your wages if:

  • you have given your employer written authorisation to make the deduction and the deduction is principally for your benefit; or
  • your applicable modern award or enterprise agreement allows your employer to make the deduction or you have authorised the deduction in accordance with that award/agreement — so long as the deduction is reasonable (see below); or
  • a law, court order or a Fair Work Commission order authorises your employer to make the deduction.

For example, modern awards may allow your employer to deduct wages and entitlements where you haven’t given the required amount of notice of resignation.

What are reasonable deductions?

A deduction is considered to be reasonable if:

  • Goods or services have been provided to you in the ordinary course of your employer’s business and your employer provides the goods or services to the general public on the same or not more favourable terms and conditions.
  • It is for the purpose of recovering costs directly incurred by your employer as a result of your voluntary private use of your employer’s property (whether authorised or not).

Your employer must not require you to spend any part of your wages if the requirement is unreasonable.

You may also have a claim for underpayment or non-payment of your relevant wage or entitlements, including if your wages have not been paid in full. If so, you can request assistance from the Fair Work Ombudsman to recover your unpaid wages.

More information about unlawful wage deductions and claiming underpayments can be found in the attached fact sheet, which we recommend you download.

For further support

Call our Telephone Information Service on Melbourne Metro (03) 9662 1933 or Regional Victoria, Queensland and Tasmania on 1800 331 617.

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