Interpretation Guidelines Manual British Columbia Employment Standards Act and Regulations

EMPLOYMENT STANDARDS ACT - PART 3 - WAGES, SPECIAL CLOTHING & RECORDS

ESA Section 22 – Assignments


Contents:

Summary
Text of Legislation
Policy Interpretation
Related Information


Summary

This section explains an employer’s obligations to honour an employee’s written assignment of wages. 


Text of Legislation

22 (1) An employer must honour an employee's written assignment of wages

(a) to a trade union in accordance with the Labour Relations Code,

(b) to a charitable or other organization, or a pension or superannuation or other plan, if the amounts assigned are deductible for income tax purposes under the Income Tax Act (Canada),

(c) to a person to whom the employee is required under a maintenance order, as defined in the Family Maintenance Enforcement Act, to pay maintenance, and

(d) to an insurance company for insurance or medical or dental coverage.

(e) [Repealed 2003-65-5.]

(2) [Repealed 2003-65-5.]

(3) An employer must honour an assignment of wages authorized by a collective agreement.

(4) An employer may honour an employee's written assignment of wages to meet a credit obligation.


Policy Interpretation

The Act requires that employee’s assignment of wages must be WRITTEN and the burden of proving that the assignment of wages was authorized is on the employer.

Subsection (1)

If the employee has given written authorization, the employer must make payroll deductions for:

  • union dues;
  • donations to a charity if the amounts are tax deductible;
  • payments to pension or superannuation plans if the amounts are tax deductible;
  • payments required under the Family Maintenance Enforcement Act; or
  • payments to an insurance company for medical or dental coverage (e.g. Medical Services Plan coverage or extended health and dental benefits).

Section 28(g) of the Act requires an employer to keep a record of each deduction made from the employee’s wages and the reason for it for a period of 2 years after employment terminates.

Subsection (3)

If an employee is represented by a trade union, the employer and union may agree to certain assignments of wages under the collective agreement. The grievance procedure of the collective agreement applies to disputes concerning such assignments. Refer also to s.(3).

Subsection (4)

Employees may arrange for assignments to meet a personal credit obligation. This obligation cannot be one that is coerced by the employer, such as a setoff or an assignment of wages to the employer.

Assignments must be made in accordance with written employee instructions. The employer has the right to choose whether or not to honour an employee’s written assignment to meet a credit obligation.

Example

An employer lends Betty $500 to purchase a car. Betty signs a written agreement to repay the amount at $100 per month, but the agreement does not address what will happen if Betty's employment ends before the loan is fully paid back. Betty leaves the company after two months with $300 still owing. The employer cannot deduct more than $100 from the final wages unless Betty provides written authorization.

Example

Tom purchases clothes at the store where he is employed. The purchases are made on Tom’s staff account, which is paid by payroll deduction at the end of each month. Tom’s employment ends at a time when the staff account balance is not yet due. The employer cannot deduct the balance from the final wages unless the written authorization also stated that any outstanding balance could be deducted upon termination of employment.

Example

An employer provides a car for Brenda’s business use while working. The parties agree that Brenda will pay the employer $100 per month for her personal use of the car. Brenda provides a written assignment for the $100 per month to be deducted from her paycheque. This is acceptable because it is considered to be a credit obligation which is for the employee’s benefit.

Insurance Deductibles

If an accident involving a company vehicle occurs during the course of company business, this is a cost of doing business for the employer. The insurance deductible or any other costs must not be charged to the employee.

If an employee has an accident while the company car is being used for personal reasons, the employer may request payment. Because the vehicle was not being used for business purposes, it is permissible if the employee provides written authorization for the employer to recover the liability for the insurance deductible through payroll deduction.

Employees covered by a collective agreement

Under the provisions of s.3, if a collective agreement contains any provision respecting assignment of wages, this section of the Act does not apply. If a collective agreement contains no provision respecting assignment of wages, s.22 is deemed to be incorporated into the collective agreement as part of its terms.

Under s.3(7), where there is a collective agreement, the enforcement of matters relating to assignment of wages is through the grievance procedure, not through the enforcement provisions of the Act.


Related Information

Related sections of the Act or Regulation

ESA

Other

See Employment Standards Factsheets

Factsheet

Keeping Records