Can an Employer Deduct Wages Because an Employee is Late for Work?

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As much as employers want their employees to be punctual, it’s still inevitable for some to come in late for work. It’s often difficult to ensure that employees go to work on time every day. In some cases, employers will choose to turn a blind eye when monthly-paid employees are late, as long as they don’t always do it anyway.

However, there are also cases where employers strictly implement their attendance policies, which may pose a problem especially for employees who are paid hourly.

Under Hong Kong’s Employment Ordinance, an employer can deduct wages from their employee if they are absent from work. The sum to be deducted should be proportionate to the period of time the employee is absent from work. There are two points to consider when it comes to wage deduction in relation to attendance:

  1. If an employee’s wage is calculated on the basis of time, no such deduction shall exceed a sum proportionate to the period of time during which the employee was absent from work.
  2. No such deduction shall be made for the purpose of defraying or partly defraying the cost of holiday pay or sickness allowance which the employer has paid or may be or may become liable to pay to the employee.

For example, if an employee, whose wage is $60 per hour, is 13 minutes late, the sum to be deducted should be proportionate to the 13 minutes worth of wages. It can be calculated as follows:

$60 ÷ 60 mins × 13 mins = $13

Therefore, the employer can only deduct $13 from the employee’s salary at most. It’s important to note that employers who illegally reduce the wages of employees are liable to prosecution and, upon conviction, to a fine of $100,000 and to imprisonment for one year. 

To avoid such penalties and other labor disputes and ultimately protect their employees’ labor rights, employers must accurately record their employees’ attendance. This is where technology comes into play. Digital technologies can help employers precisely monitor what time their employees clock in and out at work. When traditional companies still use paper to record attendance, they won’t be able to determine which employees are late, which may cause problems in computing wages.

Workstem’s HR Apps, for instance, can resolve problems in both attendance and payroll. Its Staff App allows employees to seamlessly clock in and out with one tap and accurately record dates and locations. Meanwhile, its Supervisor App enables employers to view employee attendance in real time. When it comes to payroll, the Workstem’s solutions automatically calculate the net pay based on the employee’s working hours. 

In this day and age, it’s now possible to use one platform to manage various HR tasks―from attendance down to payroll. Technology proves that it can improve business operations and generally help companies keep up with their internal processes.

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(The article on this website is intended to be for reference and general information purposes only. Workstem does not warrant or represent that such information is complete, accurate or up to date. It should not be treated as a complete and authoritative statement of law or court practice, or a substitute for professional legal advice.)

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