I want to deduct costs from wages
AH writes: I want to introduce a policy on mobile phones. The company will pay for all business calls. Employees will pay for personal calls, and we will deduct the cost of these from monthly salaries. Can I do this? And do I need to include it in employees’ terms and conditions?
What you can do will depend on your current terms and conditions as well as custom and practice, writes Peter Done, managing director of Peninsula.
If employees have always had to pay for personal use of a company mobile, then all you are looking at introducing is a deduction from salary for the calls. If you have not previously asked employees to pay for personal calls, it is trickier.
If deductions are to be made from wages, this needs to be a term of the contract previously notified to employees in writing or something to which they have given their signed consent. Where there is already an agreement to pay for personal calls, your mobile phone policy is simply confirming the terms and making arrangements for payments to be deducted from salaries. This is arguably a term of the contract and so the policy would be fine, but it would be safest to have your employees sign their agreement so that there is no dispute.
If there is no agreement on paying for personal calls, you have to be a little more careful. Look at your contracts to see if they require your employees to abide by company policies and if they give you the right to change those policies. If you can change or introduce policies, you can bring this in. Again, though, it is best to get your employees’ signed consent to avoid any dispute.
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If you don’t have the right to introduce policies and you have allowed people to make personal calls without being charged, then you will need to hold a meeting with your staff to discuss the situation and come to some agreement.
State in the policy that this forms part of the terms and conditions of employment as this will avoid the need to amend each contract.
Can I hold on to personal data?
SA writes: We have a number of business documents that might contain personal information on people employed by the company or with whom the company has had a business relationship. What is the statutory retention period for these documents and is it possible to keep them indefinitely? How long should the company’s other records be held?
The holding of personal data is governed by the Data Protection Act 1998, which applies to most businesses and organisations, writes Jon Sutcliffe, partner at Kingston Smith LLP.
The fifth principle of the act states that personal data processed for any purpose shall not be kept for longer than is necessary for that purpose. In practice, it means that you will need to:
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It is therefore necessary to look at what law or industry guidelines apply. The Companies Act requires a private company to keep its records for three years from the date they were made. Public companies must keep them for six years. For corporation tax, records may need to be kept for up to six years. This can be longer where a return is filed late or is subject to inquiry or amendment. For Vat, the general rule is that you must keep all relevant records for at least six years. If this causes you problems in terms of storage or costs, then HMRC may allow you to keep some records for a shorter period.
Kingston Smith LLP, the chartered accountant, and Peninsula, the employment-law firm, can advise owner-managers on their problems.
Send your questions to Business Doctor, The Sunday Times, 3 Thomas More Square, London E98 1ST, or fax to 020 7782 5765. Advice is given without legal responsibility.