Don’t Touch My Wages! Withholding Pay from Employees

by Stan Fainzilberg

Friday, February 17th, 2017 at 8:02 am

At Samfiru Tumarkin LLP, we often hear our employees telling us about employers withholding pay or deducting monies from their pay.

“My employer is withholding monies from my pay cheque”.

“My employer says that I went on too long a lunch and is deducting the time from my wages”.

“My employer doesn’t want to pay my accrued bonus after my termination, even though its February and it was for the previous year”.

The employee is often unsure if the employer can do this legally, or what recourse the employee has against their employer. The situation is often exacerbated by the fact that the employee is often still working for the employer and is fearful of losing their job if they take any action. However, except in very narrow and extreme situations, an employer has no legal right to withhold, deduct, or set-off any monies the employee may owe the employer by unilaterally taking it off the employee’s wages.

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The Employment Standards Act, 2000 (the “ESA”), makes this explicitly clear at section 13(1) where it states the following: “An employer shall not withhold wages payable to an employee, make a deduction from an employee’s wages or cause the employee to return his or her wages to the employer unless authorized to do so under this section.” In short, withholding pay is against the law.

While it may be clear that the ESA prohibits such actions, the employee is still left with the practical question of how to enforce their rights and what will happen if they do so. One possible option is for the employee to claim that the employer’s unilateral actions constitute an indication to no longer maintain an employment relationship, allowing the employee to resign and claim constructive dismissal and their entitlement to a severance package.

However, most employees are very hesitant to go this route as it leaves them without employment and immersed in litigation. As such, another option would be for the employee to make a complaint to the Ministry of Labour directly. Undoubtedly, such a complaint will anger any employer and employees are often fearful of termination if they complain.

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The ESA, however, foresaw such a predicament and includes a provision that specifically prohibits any employer from taking any action that can constitute a reprisal as a result of an employee simply enforcing their rights under the ESA. Thus, if an employer did decide to terminate someone as a result of a complaint, that employer could potentially be liable for significant damages as a result of their bad faith.

Employees need to remember that they do have rights and the law is there to protect them. If your employer is illegally withholding pay or deducting monies from your pay, don’t be afraid to confront your employer and remind them of that.

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Stan Fainzilberg is an associate lawyer with Samfiru Tumkarin’s Labour and Employment Law Practice Group in Toronto, Ontario.

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