On September 7, New York Governor Andrew M. Cuomo signed a bill
amending New York's Wage Deduction Law (Section 193 of the New
York Labor Law) to permit employers to deduct certain amounts from
employee paychecks. This legislation effectively overrules the
restrictive interpretation of permissible wage deductions
previously taken by the New York State Department of Labor in a
series of Opinion Letters. The revised law will take effect in
November 2012.
Prior to these amendments, Section 193 provided a narrow list of
permissible wage deductions that could be taken with express
written authorization from an employee. These permissible
deductions included payments for insurance premiums, pension or
health and welfare benefits, charitable contributions, U.S. bonds,
union dues or assessments, and similar payments for the benefit of
the employee. The new legislation expands the list of permissible
deductions to include purchases at events sponsored by a bona fide
charitable organization affiliated with the employer, discounted
parking and mass transit costs, gym memberships, business cafeteria
and vending machine purchases, pharmacy purchases at the
employer's place of business, and certain tuition and related
expenses for educational institutions and day care.
The amendments also explain that employees must authorize the
aforementioned deductions in writing after receiving written notice
regarding the terms and conditions of payment and details of the
manner in which deductions will be made. Employees may revoke their
authorizations at any time, and employers must retain written
authorizations during employees' employment and for six years
thereafter. Employers also must notify employees of any substantial
change to the terms of payment.
Of even more significance for employers, however, is the expanded
ability, under the amendments, to use wage deductions to recoup
wage overpayments due to mathematical or other clerical errors and
to ensure repayment of advances of salary or wages. Deductions for
overpayments and advances will be subject to regulations
promulgated by the Commissioner of Labor that will address the
timing, frequency, duration and method of repayment; notice
requirements; the procedure to dispute amounts or delay deductions;
and other requirements.
This legislation is good news for employers and employees because
prior to the amendments many of these wage deductions were
prohibited even if both parties desired them. Employers should
ensure they understand all of the requirements set forth under the
revised statute and remain apprised of new developments such as the
forthcoming procedural guidance expected from the Commissioner of
Labor.
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.