Can Your Employer Withhold 100% of Your Salary? What the Law Really Says

A recent Public Accounts Committee (PAC) hearing revealed a shocking practice: a senior official had their entire salary withheld due to an alleged breach of law. The case involved a head of institution accused of improperly increasing their rank to receive a higher salary.

This situation raises a critical question for every employee in both the public and private sectors: Do authorities or employers have the right to withhold 100% of your salary?

While the alleged misconduct certainly warrants a proper investigation, the method of punishment—withholding full pay—immediately came under scrutiny. The Vice Chair of the committee pointed out a crucial fact: there is no law that allows for 100% of an employee's salary to be withheld.

This case isn't just about one individual; it highlights a widespread issue that many employees face but are unaware of.

The Legal Limit: It’s 40%, Not 100%

During the live broadcast, comment sections were flooded with surprise and frustration. Many viewers correctly cited the legal principle of "Affordability."

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The clear legal standard, often applied in loan deductions and salary attachments, is that a maximum of 40% of an individual's salary can be withheld at any given time. This threshold is designed to ensure that an employee is left with enough income to afford basic living expenses.

This rule is so strict that if you have multiple loans, deductions will be queued. Once that 40% threshold is reached, no further deductions can be made until previous commitments are reduced, freeing up space within that limit.

If this is the standard for debt repayment, it is logically and legally inconsistent for an employer to withhold more than this—let alone 100%—as a punitive measure.

A Wake-Up Call for All Employees

This public hearing sheds light on what might be happening behind closed doors in many organizations. The comments revealed a troubling trend: some directors and managers allegedly abuse their power by illegally withholding salaries from their staff.

This practice is not just unfair; it is illegal. As some commentators suggested, employees who have faced this kind of treatment may have strong grounds to sue their employers for recovery of their wrongfully withheld wages.

Beyond Salary Withholding: The Pre-Retirement Termination Trap

This vigilance extends to other forms of financial protection. A common tactic in some private companies is to accuse employees of misconduct or incompetence just before they are due to retire. By firing them on these grounds, the company attempts to avoid paying out pensions and other terminal benefits.

This underscores why every employee must know their rights.

What Actually Constitutes a Fair Termination?

According to the Labour Act, fair termination of employment is strictly defined and includes:

Termination due to the worker’s incompetence (which must be proven).
Termination due to the worker’s proven misconduct (following a fair disciplinary hearing).
Redundancy as laid out in the law.
Termination due to legal restrictions that prevent the worker from performing their job.

Simply accusing an employee is not enough. Due process must be followed, and in cases of termination, all accrued benefits must be paid.

Step Up and Be Vigilant

Your salary is your livelihood, and it is protected by law.

If your employer withholds your salary illegally, you have the right to challenge it.
If you are facing termination, especially near retirement, understand what constitutes "fair" dismissal and ensure your benefits are not wrongfully denied.

Do not be silent. Arm yourself with knowledge, understand the Labour Act, and use the legal system to protect yourself when necessary. Your financial security depends on it.

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