The only types of deduction employers can make are ones mandated by law, such as CPP, Federal/Provincial tax, or court ordered garnishments. A court may order the employer to deduct wages from the employee if money is owed to the employer or a third party. If the deduction is for a third party, the employer must send the deduction to the court clerk, who then pays the third party. The amount and method of payment must be specified, and the amount is limited to the provisions in the Wages Act.
Another way an employer may deduct wages is by agreement with the employee, and this should be in writing. Again, the specific amount or method of calculation should be specified. However, there are restrictions. Even if in writing, an employer can never legally deduct wages to cover losses from poor service or work by the employee, for damaged tools or company vehicles used for business purposes, or when there is stolen money or property that the employee did not have exclusive access to.
For example, an employer may have its employees sign an agreement to pay a replacement fee for a company cell phone in the event it is accidentally damaged by the employee. Even if agreed upon, this would not be binding. In the event it is enforced, the employee can make a complaint to the labour board. Employers, therefore, must be mindful of what cannot be legally deducted. What may be seen as reasonable could in fact result in unnecessary conflict and fines.