Employer's Duty to Make Assigned Payments - Act Part 3, Section 23
This section requires the employer to pay the assigned wages deducted from an employee’s pay within a specified period of time.
23. An employer who deducts an amount from an employee's wages under an assignment of wages must pay the amount
(a) according to the terms of that assignment, or
(b) within one month after the date of the deduction,
whichever is sooner.
The director is able to collect, as unpaid wages, amounts that an employer has deducted from an employee’s wages and failed to remit to a third party on behalf of an employee. Although the director can collect these amounts as wages, the employee is not entitled to vacation pay on these wages if the employer previously provided vacation pay.
The employer must remit payments within one month after the date of deduction, or sooner, if required by the terms of the written assignment.
The one-month limit ensures that the employee receives benefit for the amount deducted within a reasonable time, and provides a point at which an unremitted deduction can be deemed unpaid wages and collected.
A company that had arranged dental coverage for its employees failed to pay the insurer the premiums, which were deducted from employees’ wages. An employee has $500 in dental work done. They later find out that because the employer had failed to remit the premiums, no dental coverage was in place. They are required to pay the $500 dental bill. The director can collect as outstanding wages the amounts that were deducted and not remitted. The director has no authority to require the employer to reimburse the employee for the $500 dental bill.
Employees covered by a collective agreement
Under the provisions of s.3, if a collective agreement contains any provision respecting s.23 (employer’s duty to make assigned payments), this section of the Act does not apply. If a collective agreement does not contain any provision respecting s.23, this section is deemed to be incorporated in the collective agreement as part of its terms.
Under s.3(7) of the Act, where there is a collective agreement, the enforcement of matters relating to s.23 is through the grievance procedure, not through the enforcement provisions of the Act.
Related sections of the Act or Regulation