Deductions from Wages

David Greenwood

On September 15, 2012, 44 year old gas station attendant Jayesh Prajapati was killed while trying to stop someone from stealing $112.85 in gas.

Following this tragedy it has been suggested that one of the reasons Mr. Prajapati may have risked his life to stop the fleeing vehicle was because his employer had a practice of holding employees liable for stolen fuel.  Mr. Prajapati’s employer emphatically denies that it held employees liable for stolen gas.  However, if this was the employer’s practice (or if Mr. Prajapati mistakenly believed that this was the practice), one begins to understand why he may have tried to stop the vehicle as $112.85 represents a significant portion of his day’s earnings.

This incident brings into the spotlight a significant legal issue in employment law: can an employee be held responsible for losses sustained by the employer?

In this particular case, the answer is no.  Section 13(3) of the Employment Standards Act, 2000 states that an employer is not permitted to deduct from an employee’s wages any amounts which arise:

  • from faulty work;
  • 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
  • under any prescribed conditions.

Clearly the theft of gas by an unaffiliated person falls within the prohibitions listed above and consequently, Mr. Prajapati could not have been held responsible for the cost of the stolen gas.  Sadly, had Mr. Prajapati been aware of the protections under the ESA, this tragedy may not have occurred.

While there are circumstances under which an employee can be held liable for losses suffered by an employer, these are governed by very strict requirements. Generally speaking, withholding money from an employee’s wages must be permitted by statute, court order or written authorization and must not be prohibited by section 13(3). Where an employer seeks to rely on a written authorization, that authorization must be voluntary and refer to a specific amount or provide a formula from which a specific amount may be calculated.

Wrongfully withholding an employee’s wages may result in an ESA complaint against the employer, a lawsuit or worse, a tragedy similar to the one that occurred on September 15, 2012.

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