Authorised Employee Deductions

By Ethan Kilham

Recent changes to the Fair Work Act 2009 (‘FWA’) mean that as of 30 December 2023, employees have been granted greater flexibility as to which payments they may request their employer to deduct from their salary.

 These deductions must be (FWA s 324(1)):

1.       Authorised in writing by the employee and principally for the employee’s benefit;

2.       Authorised in accordance with either:

a.       An enterprise agreement;

b.       A modern award;

c.       A Fair Work Commission order;

d.       A law of the Commonwealth, State or Territory or an order of a court (eg income tax deductions, a deduction made for the purposes of child support by Services Australia, or a garnishee court order).

 Written consent from the employee to deduct amounts must specify whether the deduction is singular or ongoing in nature, the amount or amounts if ongoing (FWA s 324 (2)).

 Variations or withdrawals of deductions require the written consent of the employee (FWA s 324 (2)(b), (3)).

 It is important that all deductions are for the principal benefit of the employee.

Deductions taken from wages, or requirements placed on employees to expend amounts from their wages in performing their work, are unlawful where the requirement is unreasonable and for the direct or indirect benefit of the employer (FWA s 325).

Terms of a modern award, enterprise agreement or contract of employment that permit such deductions or requirements to pay are considered void (FWA s 326).

 If you are a business or employee and are uncertain of your rights and obligations regarding deductions and requirements to pay from salary, contact Eve Lynch.

Disclaimer

The above does not constitute legal advice, but is information which may be of general interest. Beswick Lynch Lawyers will not be held liable or responsible for any claim, which is made as a result of any person relying upon the information contained in this publication.