The monthly salary is a central concern for workers because it reflects the value of their labor and directly influences living standards. For that reason, employees should understand when a company may legally reduce pay and why such deductions occur beyond expectations.
Although it may seem unfair at first, there are legal circumstances under which an employer can withhold part of an employee’s wages. Here is a practical look at those situations.
When can a company deduct money from payroll?
Under labor regulations, an employer cannot penalize an employee by reducing working hours or entitlements to rest. A penalty cannot be implemented as a wage cut from wages already earned. In other words, deductions for days worked or for vacation time typically run counter to the rule that pay and work are linked, and such deductions are generally unlawful. There are, however, exceptions to this rule in certain cases.
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This concept means that a company should not punish a worker by lowering salary for misconduct. The sanction should accompany the work performed, not replace it. In practice, deductions from days actually worked are typically illegal, though some specific exceptions do exist.
Reasons why a company may lower pay
There are circumstances in which earnings can be lower than the initial agreement, leading to payroll reductions:
When illness or injury keeps someone away from work beyond a short period, the first few days are not paid as set by labor rules. From the fourth day onward, sick leave may be paid under certain conditions.
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Some collective bargaining agreements may cover these initial days with a partial salary. It is important to review the agreement to determine whether the employer is obligated to pay. If a worker is new, there can be a probationary period during which paid sick days are not accrued without at least 180 days of work in most cases.
It is possible to leave a job for justified reasons, but not all such leaves are paid. For instance, taking leave for strikes, exams, or union duties may not come with pay. In these cases, the company may reduce salary for days off taken for these reasons. It is wise to review the collective agreement again to see if it offers more paid leave than what is stated in labor law.
Frequent delays can lead to salary deductions for late arrivals or absences. Courts have treated excessive tardiness as a breach of contract. If a penalty is applied, it should reflect actual time not worked rather than a general charge for the day.
Accumulated serious or very serious misconduct can lead to suspension of duties and pay. This may occur if an employee verbally or physically harms a coworker. Collective agreements usually specify which actions justify suspension and pay consequences.
In cases of debt or nonpayment, a lien may be placed on wages. This can happen when money is owed to authorities such as tax offices or social security, or for fines. Such a lien can be used only after a final court or government order, and the amount withheld aligns with the employee’s salary.
It is important to note that employers are allowed to withhold portions of pay as required by judicial or administrative orders. However, such withholding only applies when the salary exceeds the minimum interprofessional wage. If earnings are at or below the minimum wage, no foreclosure applies. In 2023, the minimum interprofessional wage was set to a monthly gross amount of 1,080 euros as specified in applicable procedures.