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Working Wise - Paycheck Deductions

Dear Working Wise,

Can I deduct cash shortages from employee pay checks? The staff at my store are cashiers. They count their floats before they start work and at the end of their shifts. Since they are responsible for the money, can I recover the cash “lost” during their shifts?
Signed, Missing Cash

June 1, 2016

Dear Missing,

Alberta’s Employment Standards Code allows certain deductions to be made from employee earnings:

  • Income Tax
  • Canada Pension Plan
  • Employment Insurance
  • Alberta Health Care premiums
  • deductions resulting from a court judgment or order

If you want to make other deductions from your employee’s pay, you must get written permission from the employee. Usually these deductions are discussed and permissions are provided before the employee starts their job. Examples might include

  • pension plans
  • dental plans
  • personal charges to company credit cards

There are some deductions that are not allowed by Alberta Employment Standards, even with written authorization from the employee:

  • Deductions for faulty workmanship. Faulty workmanship can include things like accidental damage to an employer’s equipment, a gas station “pump & dash”, broken dishes in a restaurant or mistakes in production.
  • Deductions for cash shortages or lost property if any individual other than the employee had access to the cash or property. This could include customers, other employees, accounting staff, supervisors or managers (including you). It may be difficult to find a time when only one person has exclusive access to cash or property.

The only way you can deduct cash shortages from an employee’s pay is if you can show that they were the only person with access to the cash and the employee gives you written authorization prior to the deduction.

Alberta Labour offers an easy-to-use Employment Standards Tool Kit for Employers that can help you understand your rights and obligations under Employment Standards (ES) legislation.

Cash shortages could indicate some other issues that might require further investigation.

  • Your staff may need more cash-handling training and experience or they might be making mistakes because they are too busy. Talk to your staff about the reasons for cash shortages. You may need to step in a take a more active role in ensuring your staff has the proper skills.
  • You could also be experiencing theft in your workplace. Employee theft accounts for around one-third of all retail theft in Canada.

Most employees are honest, though, and deserve your trust. Less than 3% of employees were caught stealing in 2014 according to the 27th Annual Retail Theft Survey conducted by Jack L. Hayes International. 25 major retailers with over 23,000 stores and more than 3 million employees took part in the survey.

Photo Credit: © iStockphoto/pixdeluxe

Working Wise is a syndicated newspaper column prepared by the Government of Alberta to answer work-related questions from Albertans. Do you have a work-related question? You can send it to Charles Strachey (charles.strachey@gov.ab.ca), a manager with Alberta Community and Social Services.

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