Interpretation Guidelines Manual
British Columbia Employment Standards Act and Regulations
Employment Standards Act Part 3 - Wages, Special Clothing and Records
|ESA Section 21 - Deductions
Text of Legislation
This section prohibits an employer from withholding wages for any
reason, except as permitted by law, or from requiring an employee
to cover any business costs.
|Text of Legislation
21. (1) Except as permitted or required by
this Act or any other enactment of British Columbia or Canada,
an employer must not, directly or indirectly, withhold, deduct
or require payment of all or part of an employee's wages for
(2) An employer must not require an employee to pay any of the
employer's business costs except as permitted by the regulations.
(3) Money required to be paid contrary to subsection (2) is
deemed to be wages, whether or not the money is paid out of
an employee's gratuities, and this Act applies to the recovery
of those wages.
The cost of doing business must not be borne by employees.
This subsection prohibits an employer from withholding wages for any
reason other than for statutory deductions required by
law, such as income tax, CPP, and EI, or a court order to garnishee
an employee's wages. An employer must honour a garnishee of an employee’s
The words "directly or indirectly" give this section particularly
broad coverage. A direct payment is one that is deducted from the
employee's paycheque. An indirect payment is when an employee is required
to pay the employer money without having it deducted from a pay cheque
Fred, a server in a restaurant, breaks some dishes. The employer
may not deduct funds from Fred’s pay cheque or cash
the pay cheque and providing a lesser amount than the face value
of the cheque to recover the cost of the dishes. Nor can the employer require Fred to pay for
the damages out of personal money or gratuities. These
payments are also prohibited under s.21(2).
Employer's Business Costs
Employees are not responsible for paying an employer's business costs.
Employers are prohibited from requiring employees, directly or indirectly,
to contribute towards the costs of the employer's business by:
- withholding their wages;
- requiring that wages paid be returned to the employer; or
- requiring employees to pay any money to the employer or on
behalf of the employer.
What is considered a business cost?
An employer who operates a hair salon requires employees to pay
for shampoo, conditioners, and other similar products used for hairdressing.
This requirement contravenes s.21(2). These materials are a cost
of doing business.
- Some employers require their staff to provide a cash float
for making change to customers. This practice is prohibited since
it is the cost of doing business.
- Overweight/oversize/unsafe/speeding tickets: since the ticket
is charged against the operator of the vehicle, it is not a cost
of doing business. The rationale for this position is that the
charge against the driver arises from the application of another
statute. A party
alleged to have contravened another statute can address the consequences of the alleged contravention of the other
statute through the review or appeal procedure contained in that statute.
- The director takes the position that the cost to an employee
of providing a tool for use in performing employment duties does
not constitute a contravention of the Act, however, requiring
the employee to pay the cost of operating it does. A timber harvesting
employer can require a faller to provide a chain saw, but must
provide or pay for the cost of the fuel and lubricant used in
performing employment duties.
- A pizza restaurant requires employees to use their own vehicles
for pizza delivery. While it was a condition of employment that
employees own their own vehicle, the cost of fuel to perform their
delivery work is considered to be a cost of doing business and
is recoverable as wages under the Act if the cost of the fuel
can be determined.
- A retailer may require the employee to provide a cell phone,
however, the cost incurred by the use of the cell phone
for business purposes is to be paid by the employer.
Recovery of Wages
If an employee is charged any business costs whatsoever, under s.21(2),
the director will collect that money as unpaid wages from the employer.
Amounts deducted in contravention of this section, or payments an
employer has required an employee to make on behalf of the employer,
are considered to be wages and can be recovered under the Act. This
includes any money paid out of an employee’s gratuities or any
Restaurant servers pool all tips to be shared amongst all employees,
which is an acceptable practice. A customer leaves the restaurant
without paying the bill. The employer cannot recover the cost of
the meal from either the employee's wages or tips (gratuities) (pooled
or otherwise) because "dine-and-dash" is a cost of doing business to be borne by the employer.
If an employer overpays an employee's wages, the overpayment cannot
be deducted unilaterally from future wage payments. An employee
may provide written consent to the deduction for an overpayment
through a written assignment of wages. See section 22 of the Act
for a discussion on written assignments of wages.
Should the employee not voluntarily consent to a repayment arrangement
the employer can't use a withholding of all or a portion of wages
as a remedy.
An advance on wages is treated in the same manner as an overpayment.
If an employer gives an employee an advance on wages, the employer
is not permitted to later deduct that advance from later wages earned
unless the employee has provided written consent. This practice
often takes place with employees making commissioned earnings.
See also s.17 of the Act and Employment Standards Regulation s.37.14
for a discussion on commissions.
Employees covered by a collective agreement
Under the provisions of s.3, parties to a collective agreement are
prohibited from giving up the specific employment protection provided
in s.21. Employers, employees and unions may not negotiate terms
and conditions that do not meet the standards set out in this section.
Under s.3(7) of the Act, where there is a collective agreement,
the enforcement of matters relating to s.21 is through the grievance
procedure, not through the enforcement provisions of the Act.
Related sections of the Act or Regulation
Deductions from wages
Health Employers Assn. of BC v. BC Nurses’ Union, 2005 BCCA 343