Written authorization to deduct wages in Ontario

What is the Employment Standards Act?
 
The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and responsibilities under the Act.
 
Does the Act cover all employees in Ontario?
 
Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 
 
If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.
 
Section 13(2) of the Act states:
 
An employer may withhold or make a deduction from the employee’s wages or cause the employee to return them if a statute of Ontario or Canada or a Court order authorizes it.
 
Section 13(3) of the Act states:
 
An employer may withhold or make a deduction from an employee’s wages or cause the employee to return them with the employee’s written authorization.
 
Section 13(4) of the Act states:
 
Subsections (2) and (3) do not apply if the statute, order or written authorization from the employee requires the employer to remit the withheld or deducted wages to a third person and the employer fails to do so.
 
Subsection (4) clarifies that if the employer makes deductions from wages or withheld wages in accordance with subsections (2) and (3) and fails to forward the wages so deducted or withheld, the employer would be considered to have made those deductions improperly and the employee would be entitled to deducted or withheld wages.
 
This situation may occur if the employer makes deductions for Income Tax, CPP or EI but fails to remit those deductions to Canada Revenue Agency. If this were to happen, it would be a contravention of subsection 13(4) of the Act and the employee would be entitled to the deducted amount in a claim against the employer.       
 
Section 13(5) of the Act states:
 
Subsection (3) does not apply if,
 
     (a)     the employee’s authorization does not refer to a specific amount or provide
               a formula from which a specific amount may be calculated;
     (b)     the employee’s wages were withheld, deducted or required to be returned,
               (i)     because of faulty work,
               (ii)    because the employer had a cash shortage, lost property or had
                        property stolen and a person other than the employee had access to
                        the cash or property or
               (iii)   under any prescribed conditions; or
     ©       the employee’s wages were required to be returned and those wages were
               the subject of an order under the Act.
 
Subsection (5) clarifies that if deductions are to be valid, the written authorization must specify the exact amount to be deducted or at least provide some mechanism to calculate the exact amount.
 
It further clarifies that the employer cannot made deductions from the employee’s wages if the employer considers the work to be faulty or cannot withhold wages from the employee if there is a cash shortage or the employer’s property is stolen or lost if someone else also had access to the cash or the property. The employer also cannot withhold wages if the Ministry defines those conditions. Finally, the employer is also prohibited from making deductions if those deductions were the result of the Order issued by the Ministry against the employer.
 
If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    
 
In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional? It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the at the referee level hearing, particularly, if the issues are complex.
 
It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the employer’s evidence, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   
 
This information is provided for guidance only and should not be considered as a legal advice.

This article is provided by Rajinder K. Batra, who is a retired Employment Standards Officer with the Ministry of Labour with 15 years experience in these matters.

If you have any questions regarding your employment, please contact the writer by e-mail at     esaconsulting@hotmail.com         

If you don’t have access to e-mail; you can fax your question at (905) 331-1805.
 

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