On September 8, 2012, Governor Cuomo signed a law amending New York Labor Law §193 by expanding the type of deductions an employer can take from an employee’s wages. The new law will be effective November 7, 2012 and is subject to renewal in 3 years. Bill A10785-2011 benefits both employers and employees in that it allows your employer to deduct preauthorized personal activities from your wages. It also allows your employer to take back any overpayments he or she made to your wages.
The current law strictly limits the type of deductions your employer can make to your wages. For example, he or she can only allow deductions “made in accordance with the provisions of any law or governmental agency’s rule or regulation,” as well as employee authorized deductions made for the “benefit of the employee,” which are limited to “payments 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 benefits of the employee.”
As before, the amendment allows deductions from an employee’s wages only if the employee expressly authorizes it in writing. The amendment also provides that an employee must receive “written notice of all term and conditions of the payment and/or its benefits and the details of the manner in which deductions will be made.” If you are an employer, you must give your employees an updated total of deductions that you are taking from your employee’s wages. Also keep in mind that an employee has the right to cancel his or her authorized wage deductions at any time, which an employer must comply with.
The amended law provides for the following employee wage deductions:
- insurance premiums and prepaid legal plans
- pension or health and welfare benefits;
- contributions to a bona fide charitable organization;
- discounted parking or discounted passes, tokens, fare cards, vouchers, or other items that allow you to use mass transit;
- dues to a gym membership and health or fitness center;
- pharmacy purchases made at your employer’s place of business;
- tuition, room, board, and fees for pre-school, nursery, primary, secondary, and/or post secondary educational institutions;
- day care;
- cafeteria and vending machine purchases you make at your employer’s place of business, as well as purchases you make at gift shops operated by your employer, if the employer is a hospital, college, or university;
- payments for housing provided at no more than market rates by non-profit hospitals or their affiliates; and
- similar payments for your benefit.
The amended law also lets an employer make wage deductions to recover any overpayment of wages he or she made which was caused by his or her clerical error. It also allows an employer to made deductions to recover payment for any salary advances that were given to the employee. Keep in mind that with respect to employers recovering overpayments, you still have to comply with New York Labor Law regarding timing, frequency, duration, and the total amount that can be deducted.
If you have any questions about the amendment to the New York Labor Law, call our Wage and Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 make sure you are in compliance with all state and federal labor laws.
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