When is an employer able to take deductions from an employee’s earnings? It is imperative that employers act in compliance with Alberta legislation on this topic. Under Alberta’s Employment Standards Code, employers can make certain legal deductions from an employee’s earnings; however, this is dependent on the scenario as well as whether a written agreement was established beforehand.  

The following information is what employers must know about deductions from earnings in Alberta.  

When are deductions allowed? 

Employers are legally able to take deductions from an employee’s earnings if the deduction is: 

  • Authorized by a collective agreement (e.g., union agreements); 
  • Authorized in writing by the employee; or 
  • Required by law, such as federal and provincial tax, contributions to the Canada Pension Plan, Employment Insurance premiums, or a garnishee of the court. 

Upon starting the job, employees can make a written agreement to deductions for: 

  • Company pension plans 
  • Dental plans 
  • Social funds 
  • Registered retirement savings plans

Meals and lodging are an example of deductions employers can make, with written authorization from the employee. The employer can reduce the employee’s wages below the minimum wages to the limit of: 

  • $4.41 for each day the employer provides the employee with lodging 
  • $3.35 for each meal consumed by the employee; deductions can’t be made for meals not consumed

When are deductions not allowed? 

In certain instances, employers are never able to make deductions from an employee’s earnings; this list includes the following scenarios: 

Uniforms: Employers cannot reduce the wages of an employee to pay for uniforms. This includes any costs associated with the purchase, use, rental, cleaning or repair of a uniform, or article of apparel an employee is required to wear–during working hours. 

 

Faulty Work: Involves any act or omission by an employee, which results in a loss to an employer. Damaging employer equipment or mistakes in production are both examples of faulty work. 

Cash Shortages or Loss of Property: In the case of cash shortages or loss of property, deductions cannot be made from an employee’s earnings if the cash or property is accessible by other individuals as well.  

Examples of cash shortages or loss of property include failure to collect payment; such as walkouts in a bar or restaurant, gas-and-dash at a service station, or breakage in a restaurant. 

For greater detail on the deductions that employers can make on an employee’s pay, visit Section 12 of the Employment Standards Code. 

Do you have questions about deductions from earnings? Ask an HR expert today.  

Employerline is here to provide employers with valuable insights on Alberta’s regulations; including deductions from earnings. To speak with one of our HR experts, call our complimentary HR and employment standards helpline: 1 (888) 219-8767.