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According to Article 15 of the “Interim Provisions on the Payment of Wages,” it is clear that employers are restricted from making unauthorized deductions from an employee’s wages. There are, however, specific instances where deductions are legally permissible. These include withholding personal income tax, covering various social insurance expenses, fulfilling court-ordered alimony or maintenance fees, and other legally stipulated expenses.
However, beyond these exceptions, any deduction made from your wages without legal grounding constitutes an illegal deduction. This means if your employer pays you less than what your labor contract specifies without a valid reason, they are violating the law.
Let’s delve into some common examples of illegal wage deductions. First, fines or penalties imposed by employers as a form of punishment are not permissible. For example, employers would try to penalize employees for leaving the grounds during working hours, smoking at designated areas or falling sleep at work.
Secondly, over-withholding amounts for taxes, social insurance, or court-ordered payments is illegal. There have been many cases where the employer deducts wages for taxes and never actually pays to the tax bureau, and the same goes for social insurance.
Additional illegal practices include charging employees for training costs that should be covered by the employer unless there’s a legal agreement supporting such charges. Deducting more than the proportional amount of wages for time not worked due to absenteeism or lateness, beyond the actual loss suffered by the employer, is also illicit. For example, employers would try to deduct 3 days of salary for 1 day of absenteeism, or half a day’s wages for being late for 15 minutes, which is obviously illegal.
Consider the case of probation salaries and overtime pay. The law states that the probationary period salary must not be less than 80% of the minimum wage for the position or the salary agreed upon in the labor contract. For overtime work, employees should receive compensation not less than 150% of their regular wages for extended working hours, and even higher rates for rest days which is 200% and statutory holidays which is 300%.
Maternity and sick leave also fall under protected rights. Employees are entitled to maternity wages and employers will either tell you that you are not entitled to any maternity leave days, which should actually be at least 98, or that it is unpaid leave.
So, what should you do if you find yourself a victim of illegal wage deductions? The first step is to formally notify your employer in writing, requesting the immediate rectification of these deductions. If the issue is not resolved, you have the right to terminate your labor contract effectively and immediately. Following this, you can seek legal redress through labor arbitration and claim severance pay.