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New York State Expands List of Permissible Employee Wage Deductions

Release Date: September 10, 2012

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If you have any questions, please contact Scott P. Horton at 716.843.3949 or shorton@jaeckle.com.

NEW YORK STATE EXPANDS LIST OF PERMISSIBLE EMPLOYEE WAGE DEDUCTIONS

Permits Employers To Recoup Wage Overpayments,
But Also Imposes New Administrative Requirements

On September 7, 2012, New York State Governor Andrew Cuomo signed into law a bill that amends Section 193 of the New York Labor Law ("Section 193"). Section 193 generally prohibits covered employers from making deductions from the wages of their employees, with limited exceptions. The amendments expand the categories for which employers may make deductions from wages, including various items for the employee's benefit, as well as recovery of overpayments of wages and pay advances. The amendments also impose new obligations on employers with respect to wage deductions.

The amendments will become effective on Tuesday, November 6, 2012, but will be automatically repealed three years after the effective date (i.e., November 6, 2015), barring extension by the Legislature. The New York State Department of Labor ("DOL") must adopt new regulations regarding several specific items set forth in the amended statute. The DOL has not yet published such regulations.

(Note: Section 193 does not apply to governmental agencies, including municipalities, who are expressly excepted from the applicable definition of "employer.")

Expansion of Specific Categories of Wage Deductions

Prior to these amendments, Section 193 only permitted employees to make deductions from employees' wages: (1) if authorized by law; or (2) where authorized in writing by the employee for insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, payments for United States bonds, payments for dues or assessments to a labor organization, and "similar payments for the benefit of the employee." The DOL had taken a restrictive view on the "similar payments" provision, essentially limiting permissible deductions only to the specifically enumerated items, tax withholdings, and court-ordered wage garnishments.

Effective November 6, 2012, Section 193 will expand the list of permissible deductions with written employee authorization to the following:

insurance premiums;
prepaid legal plans;
pension or health and welfare benefits;
contributions to a bona fide charitable organization;
purchases made at events sponsored by a bona fide charitable organization affiliated with the employer where at least 20% of the profits from such event are being contributed to a bona fide charitable organization*;
United States bonds;
dues or assessments to a labor organization;
discounted parking or discounted passes, tokens, fare cards, vouchers, or other items that entitle the employee to use mass transit;
fitness center, health club, and/or gym membership dues;
cafeteria and vending machine purchases made at more...

This Jaeckle Alert, prepared by the attorneys at Jaeckle Fleischmann & Mugel, LLP, is intended for general information purposes only and should not be considered legal advice or an opinion on specific facts. For more information on these issues, contact one of the attorneys listed above or your existing Firm contact. Prior results do not guarantee a similar outcome. The invitation to contact is not a solicitation for legal work in any jurisdiction in which the contacted attorney is not admitted to practice. Any attorney/client relationship must be confirmed in writing.