Overview
- Currently the deductions process – set out at section 324 of the Fair Work Act – authorising employers to make deductions from an employee’s salary for their benefit (for example, deductions made as a salary sacrifice to pay health fund or union fees) does not allow an employer to make a deduction when the amount of the deduction varies, including where it varies by a nominal amount or reduces, without a new written authorisation.
- The proposed change would allow an employee’s initial written deduction authorisation to specify that the amount of a deduction can be varied from time to time. Employees will be able to choose to specify an upper limit for permitted deductions on their authorisation, either as a dollar amount or a percentage, within which the deduction can be varied without requiring a new written authorisation, as is currently required for any change to the deduction amount.
- Employers would also be required to notify employees about changes to the amount deducted under a valid authorisation, and whether an upper limit had been surpassed and the deduction therefore not paid.
Considerations
- The proposed amendments seek to reduce difficulties for employers processing deductions and employees seeking deductions, without reducing protections for employees. This would include, where appropriate, prescribing certain requirements in regulations rather than in the Fair Work Act.