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UKSolicitorJA, Solicitor
Category: UK Employment Law
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Experience:  solicitor
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Withholding of salary (100%) for three months.... (UK)

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Hi, I hope you can help out here. I am from the UK, work for a UK company, with a UK contract, but have worked remotely from various locations overseas for the last 3 years. They have been paying me into my personal overseas bank account, along with any payments to pay suppliers. One payment made in the middle of this year has been withheld by my bank, as there have been a large amount of funds going into my personal account through much of the year. The reason for this is that where I pay tax (Taiwan), tax is paid once a year based on salary and as my resident permit was up for renewal, they are withholding this so that tax on the higher amount (including salary and company payments - this is personal tax, crazy!) is definitely paid without me skipping the country. The funds will be released once I supply them with a tax certificate (in January) showing that I have paid the tax. As this resulted in a couple of suppliers going unpaid, my company has now paid them directly. However, at the same time, they have said that they are recouping these funds (about GBP 10,000) by withholding my entire salary for the next 3 months. This was pretty bad news, as my salary is due next week and I have my own payments to make. Before they said that they will withhold my salary, I reminded them that funds in my bank would be released in January, so I would be able to reimburse them then, directly. In fact, I spoke to my bank this morning and they would be happy to lend me the money to pay the company back if they need to withhold the money (if the tax certificate is delayed) further than the end of January. Because I have offered to pay them back and given them a timescale to do so in, are they legally able to withhold 100% of my salary? I'm pretty sure that this is covered by the ERA 1996 - I know they can withhold monies for overpayment, but in this case it was not an overpayment (until their paying out again this month) and I had previously offered to reimburse them within a given timeframe. I have also read somewhere that employer cannot withhold 100% of a salary, as they are not allowed to reduce the payment to below the minimum wage? If someone could offer some advice, that would be most appreciated, as I need to write and convince them to pay me over the weekend! Thanks!


You are quite correct, even with your express permission, your employer cannot make make deductions from your wages if they go below the national minimum wage (NMW).

So, your employer must pay you at least the equivalent of the NMW, they cannot simply pay you nothing for the next 3 months, even if you were to consent to them paying you nothing.

Your proposition seems very reasonable i.e. you paying them back if they have to clear your tax affairs for you if you have not cleared them.

S. 13 of the ERA 1996 normally prohibits deductions from wages unless they are authorised by statute or contract or where the worker has consented to the deduction.

See here:

Hope this helps-please leave feedback

Customer: replied 3 years ago.

Thanks for getting back to me on this.


So because I have made a 'very reasonable' proposal, they should not be deducting wages? If I was to take this further (i.e. go to a tribunal), would the fact that I've made this offer be taken in to account? I have all the emails documenting this.


Many thanks for your help and kind assistance.

The question would be are they allowed to make the deduction or not.

If not, then they cannot do so.

If they can make the deduction, then they are allowed to reject your proposal, however reasonable it may be, subject to the NMW rules.

But in the ineterests of good order, they should accept your proposal nevertheless but that may be a moral argument rather than a legal one.

Hope this clarifies. Please leave feedback
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