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Underpayment of wages

This guide is for RCN members who have been underpaid by their employer. It provides information on your rights, your employer's responsibilities and the support available from the RCN.

Deductions from your pay

Your employer is not allowed to make a deduction from your pay or wages unless:

  • it's required or allowed by law, e.g. National Insurance, income tax or student loan repayments
  • you and your employer agree the deduction in writing
  • the contract of employment states that they can do this
  • there is a statutory payment due to a public authority
  • you've not worked due to taking part in industrial action
  • it's the result of a court order or employment tribunal decision.

The Employment Rights Act 1996 affords protection against unlawful deductions from wages to employees, agency workers (but not self employed people) and apprentices. 

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If you are underpaid

If you are underpaid you should:

  • check if it's a lawful deduction
  • read your payslip and contract of employment for an explanation 
  • speak to your employer to find out if this is an administrative error. If so, your employer should pay you what you are owed as soon as possible 
  • keep a detailed diary including any expenses incurred, such as any bank charges 
  • put the details in writing, explaining the net amount of your claim and your basis for claiming it 
  • send the letter to your employer (payroll and human resources departments) by recorded delivery and keep a copy for your records.

If the matter is not resolved, call us. You may have grounds for a grievance or possibly a claim for unauthorised deductions from wages under Part II Employment Rights Act 1996.

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Employment tribunal claims

Before bringing a claim for unlawful deduction from your wages, call us for advice. We will explore whether you may have grounds to take out a grievance.

If you can't sort things out directly with your employer, you must notify ACAS of your intention to lodge an employment tribunal claim. They will offer you the opportunity to use Early Conciliation.

You can make a claim to an employment tribunal within three months of the underpayment. If there is more than one deduction from your wage, then provided that the complaint is made within three months of the last deduction, you can also claim for the earlier deductions. Although if there has been a break of more than three months between successive deductions that will break the chain. In addition, for claims presented on or after 1 July 2015, there is a two-year cap on back pay. See the Deductions from Wages (Limitation) Regulations 2014.

If you miss the three month time limit and cannot make a claim to an employment tribunal, you can pursue your claim through the county court for a breach of contract claim. The limitation period is six years from the date of the breach. In Scotland, this should be done through the sheriff’s court within five years of the unlawful deduction.

Timing is very important. Make sure you are within the time limits for making a claim to the employment tribunal.

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Monies owed if you are self-employed

You can make a claim in the small claims court for up to £10,000 in England and Wales and £3,000 in Scotland and Northern Ireland. If the case is thought to be too complex, or above the small claims track limit, the judge can decide that you will have to use the full county court. The county courts deal with a wide range of civil cases including employment and consumer disputes, personal injury and debts. 

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