Employment Act 1968 · 2020 Revised Edition · Part 3 · Payment of Salary
31. Recovery of advances and loans
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The recovery of an advance of money made to an employee before the commencement of a contract of service is to begin from the first payment of salary in respect of a completed salary period, but no recovery may be made of any such advance made for travelling expenses.
employee
“employee” means a person who has entered into or works under a contract of service with an employer and includes a workman, and any officer or employee of the Government included in a category, class or description of such officers or employees declared by the President to be employees for the purposes of this Act or any provision thereof, but does not include any of the following:(a)any seafarer;(b)any domestic worker;(c) (d)any person belonging to any other class of persons whom the Minister may, by notification in the Gazette, declare not to be employees for the purposes of this Act;
Advances may be recovered in instalments by deductions from salary spread over not more than 12 months.
salary
“salary” means all remuneration including allowances payable to an employee in respect of work done under his or her contract of service, but does not include —(a)the value of any house accommodation, supply of electricity, water, medical attendance, or other amenity, or of any service excluded by general or special order of the Minister published in the Gazette;(b)any contribution paid by the employer on his or her own account to any pension fund or provident fund;(c)any travelling allowance or the value of any travelling concession;(d)any sum paid to the employee to reimburse him or her for special expenses incurred by him or her in the course of his or her employment;(e)any gratuity payable on discharge or retirement; and(f)any retrenchment benefit payable on retrenchment;
An instalment under subsection (2) must not exceed one‑quarter (or such other proportion prescribed in substitution by the Minister) of the salary due for the salary period in respect of which the deduction is made.
Loans may be recovered in instalments by deductions from salary.
An instalment under subsection (4) must not exceed one‑quarter (or such other proportion prescribed in substitution by the Minister) of the salary due for the salary period in respect of which the deduction is made.