January can be a challenging time of year with finances commonly stretched over the Christmas period.
For those who are unpaid or underpaid during that time, the effects can be frustrating at best and devastating at worst.
Broadly speaking, it is against the law for your employer not to pay your wages.
What are wages?
The term ‘wages’ doesn’t just cover your basic salary, but also any bonus or commission payment, holiday pay, sick pay or pay during family related leave such as maternity pay. It doesn’t include any loan, expenses or pension payments.
It is also common for bonuses to be paid at the end of the calendar year and if you feel that you are entitled to a bonus payment, having met the criteria, then it could have been withheld unlawfully. This may be true even if the bonus is described as a discretionary one.
What are my rights?
It is generally against the law for your employer to withhold your pay unless you have agreed for them to do so in advance.
Your employer can deduct money from your wages if they have previously overpaid you, but even then, they should do so reasonably so as not to cause you financial hardship.
There are other circumstances where a deduction may be lawful, such as if the law requires it or where you missed work due to strike action.
If you have not been paid when you were expecting to be, you should seek advice. If your salary has been reduced without your consent, then again this may constitute an ongoing series of unlawful deductions of wages.
What can I do?
Claiming unpaid wages is one of the most common types of claim brought in the Employment Tribunal. It isn’t always necessarily a business trying to wriggle out of a contractual promise, but more usually, because they can’t afford to pay their staff.
If you have been underpaid, the first step would be to challenge it with your employer.
You can do this informally or through the internal, grievance procedure. If you haven’t successfully resolved the dispute, then you can issue a claim in the Employment Tribunal to seek an order from a Judge for the payment to be made to you.
In order to commence this process, you must do so by first contacting the Advisory, Conciliation and Arbitration Service (Acas) and initiating Early Conciliation. This must be done within three months less one day from the date that the deduction was made, or from the last in a series of deductions.
There is no limit on the amount that can be awarded by the Tribunal of the sums unlawfully deducted, unlike if the claim had been brought as a breach of contract claim. However, the claim would be limited to a maximum of two years of deductions from the date of the claim where the deductions were made at least every three months.
If your employer becomes insolvent, you may still be able to recover your wages, commission, holiday pay and any statutory redundancy pay from the Insolvency Service.