ARE EMPLOYEES ENTITLED TO ADVANCES ON WAGES?

Employees are not entitled to an advance on wages. An employer may, at his discretion, agree to grant employees an advance on their wages of not more than one month.

It is common practice to allow employees a festival advance of one or two weeks’ wages. Employees who wish to receive this or any other advance should be required to apply in writing. The employer may prepare a standard application form.

An advance of more than one months’ wages can only be granted if it is for specific purposes listed in the Employment Act. These are to purchase or pay for: 

1. A car, motorbike or bicycle 
2. A piece of land, a house, or to renovate a house 
3. A computer 
4. Medical expenses for himself or his immediate family 
5. Educational expenses for himself or his immediate family 
6. Personal expenses while awaiting a compensation claim for temporary disablement to be paid by the Employees Social Security Organisation 
7. Shares in the employer’s business being sold by the employer to employees 

Should an employee request an advance on wages of more than one month for a purpose which is not listed above, before agreeing to the request, the employer will have to apply for permission from the Director General of Labour. The Director General has wide powers whether to accept or reject the application by the employer.

Employers should consider carefully the potential problems associated with the giving of advances to employees. Advances are repaid through deductions from wages. Should an employee leave his employment before paying back an advance in full, it may be difficult for the employer to recover the money through the civil courts.

Find more GUIDE TO EMPLOYMENT & LABOUR LAW in our website here www.labourlawbox.com