Deducting pay for lateness and early leave, the same way every time

The short answer

The basis for deducting pay for lateness or leaving early is the time not worked. Deducting more than that is a disciplinary pay cut under the Labour Standards Act, which has limits. Write the rule into the company's regulations and never let the calculation vary by who is doing payroll.

Start from the time not worked

Wages are paid for work performed, so time not worked need not be paid — often called "no work, no pay". Thirty minutes late means thirty minutes' wages may be deducted. Article 24 of the Act also requires wages to be paid in full, so deducting beyond the time not worked runs into that principle.

Beyond the actual time: a disciplinary cut

Rules such as "one hour off for any lateness" or "round five minutes up to thirty" deduct more than the time lost; the extra is a disciplinary pay cut. Article 91 limits it:

• One instance may not exceed half of one day's average wage
• The total may not exceed one tenth of the wages for one pay period

A disciplinary cut must also be set out in the work rules. Keep the penalty part and the time-not-worked part separate.

What the rules should say

1. The unit of deduction
2. How the hourly wage is calculated
3. Which allowances are included
4. How documented delays (for example transport delays) are treated
5. Whether there is a disciplinary cut, and what it is

One consistent flow

1. Attendance records the exact late or early times
2. The close fixes the deductible time
3. Payroll applies the formula from the rules

APOUL KINTAI keeps clock-in records and a record of any corrections, and hands the closed figures to the next step.

Summary

Deduct for time not worked; anything more is a limited disciplinary cut that must be in the work rules. Consult a specialist when drafting the rules.