Can I deduct my employee’s salary for damages or losses that they have caused to my business?
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Generally, an employer is prohibited under section 32 of the Employment Ordinance (Cap. 57) from deducting their employee’s wages. However, if damage or loss has been caused to the employer’s equipment, goods or property by the employee’s default or neglect, the employer can deduct the employee’s wages. In any one case, the sum to be deducted from the employee’s wages should be equivalent to the value of the loss or damage, but it cannot exceed HK$300. The total of the deductions also cannot exceed one quarter of the employee’s wages payable during that wage period.
An employer may be liable to prosecution and to one-year imprisonment and a fine of HK$100,000 upon conviction if they make any illegal deduction from their employee’s wages (section 32 of the Employment Ordinance (Cap. 57)).
Bibliography:
- Labour Department, ‘Chapter 3: Wages’: https://www.labour.gov.hk/eng/public/wcp/ConciseGuide/03.pdf
- 1823.gov.hk, ‘In what circumstances can an employer deduct the salary of an employee?’: https://www.1823.gov.hk/en/faq/in-what-circumstances-can-an-employer-deduct-the-salary-of-an-employee
