Employment Law

Can employers deduct employees’ wages at their discretion?

 

Under what conditions can employers deduct employees’ wages?

 

Section 24 of the Employment Act 1955:

1. Employers can deduct any overpayment of wages made by mistake during the preceding 3 months from the month in which the deductions are to be made;

2. Deductions can be made for compensation payable by the employee due to resignation without proper notice;

3. Deductions can be made for advances of wages previously made to the employee.

 

However, the total deductions cannot exceed 50% of the employee’s monthly income.

 

Can employers deduct my wages if they claim I have performed poorly?

 

No, the employer is likely to be in violation of the law.

Section 91(c) of the Employment Act 1955:

Only deductions authorized by law are permissible from an employee’s wages.

 

What penalties can employers face for arbitrarily deducting employees’ wages?

 

Section 99A of the Employment Act 1955:

Employers can face a maximum fine of RM10,000.