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On June 21, 2012, the New York State Legislature passed
Bill A10875-2011 (the "Bill"), which enumerates a
host of new, permissible wage deductions from employee paychecks.
The Bill will likely be signed into law by Governor Andrew M.
Cuomo, who published a
memorandum in support of the legislation. Governor Cuomo's
statement in support of the Bill notes that employers'
inability to make deductions for valuable services provided to
employees is disadvantageous to both the employer and the employee.
The law presently permits deductions under two circumstances only:
(1) as otherwise authorized by law (e.g., tax withholdings or
Medicare contributions) and (2) the narrow, statutorily enumerated
deductions in Section 193 of the New York Labor Law (e.g.,
charitable organizations, labor organization dues, insurance
premiums, and retirement contributions).
The newly enumerated deductions are numerous and include, but
are not limited to, the following: parking passes or mass transit
vouchers; gym membership dues; certain purchases made by the
employee, such as cafeteria or vending machine purchases at the
employer's place of business; tuition, room and board fees; and
day care expenses.
Additionally, the new amendments allow employers to make
deductions to recover an overpayment of wages that is due to
mathematical or other clerical errors, and to recoup salary or wage
advances. Wage deductions related to overpayments and repayments of
wages must comply with additional regulations promulgated by the
New York Department of Labor ("NYDOL") (addressing, e.g.,
the timing, frequency, duration, and method of recovery; heightened
notice requirements; and implementation of an employee-dispute
system).
The recent amendments are a welcome change for New York
employers, as state courts and NYDOL Opinion Letters have
consistently taken a narrow approach to the deductions enumerated
in Section 193. The legislation will take effect 60 days following
Governor Cuomo's enactment. All wage deductions require a
voluntary, written employee authorization, which may be freely
revoked. Employers should note that the law will expire three years
following the date of enactment, should no further legislative
action be taken. Further, given additional requirements that will
be promulgated from time to time by the NYDOL, employers should
continue to closely monitor the legislation's upcoming
activity.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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