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Topic: Pay and pensions

advance notice of cash shortages and stock deficiencies
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Advance notice of cash shortages and stock deficiencies

Advance notice of cash shortages and stock deficiencies

 

Workers in retail employment have special additional protection in respect of deductions from their wages to recoup cash shortages and stock deficiencies. An employer may not deduct more than one-tenth of the gross wages payable to the worker on a particular pay day and must make the deduction not more than twelve months after the date when the shortage or deficiency was discovered, or ought reasonably to have been discovered.

When to use

Use our Advance Notice of Cash Shortages and Stock Deficiencies letter to give advance warning to a worker in retail employment of deductions to be made from their wages on account of cash shortages and stock deficiencies. It sets out the exact deduction from wages to be made on a particular pay day (limited to no more than one-tenth of gross wages), the total amount of the cash shortage or stock deficiency and when it was discovered and whether any further deductions will be made on future pay days in respect of the cash shortage or stock deficiency until the full amount is recouped.

 

Receipt of payments

In addition, employers cannot receive from the worker any payment on account of a cash shortage or stock deficiency unless certain requirements are met. The employer must notify the worker in writing of their total liability in respect of the shortage or deficiency and make a written demand for payment which is made on one of the worker’s pay days. Again, the amount demanded on a particular pay day cannot exceed one-tenth of the gross wages payable to the worker on that pay day and the demand must be made not more than twelve months after the date when the shortage or deficiency was discovered, or ought reasonably to have been discovered. An employer will need to follow this procedure where, for example, there is no appropriate deductions from wages clause in the worker’s employment contract.

 

Final payment of wages

The restriction of deductions and payments to one-tenth of gross wages does not apply to deductions or payments made from the final payment of wages on termination of employment.

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