As the term "contractor" implies, the relationship between a contractor and its employer is *contractual*, or governed by the terms of the agreement (whether unwritten [oral] or written) between them. The employer may only deduct or dock pay if *the agreement* says they can--like any other contract, it can have credits, deductions, penalties, etc., but they must be agreed to.What this means in practice, if you don't have a written contract for a given length or period of time (e.g. a year-long contract) or for a specific project you are working on (whose duration is therefore the duration of the project) is that deductions may not be made retroactively, before you are given notice of the policy--that is, they can't all of a sudden take money out when you were not warned or told they might do this. However, an oral (unwritten) agreement may be changed at will, with nothing more than notice of the change. So once they tell you they are doing this, from that point forward, they may--it becomes part of the agreement between you. Your option or recourse, if you don't want to work under those terms, is to stop working for this employer if you like the terms of employment. (This is the same way that you could at any time, when there is an oral agreement, tell them that you are going to charge more--and if they don't like that, they can stop working with you.)