For almost 50 years, New York has had one of the most restrictive state laws on deductions from wages. Under Labor Law Section 193, wage deductions were permissible only when required by law or limited to “payments for insurance premiums, pension or health or 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.” As a result, employers had great difficulty recovering wage overpayments, vacation advances, and loans through payroll deductions.
A new amendment to Labor Law Section 193, effective November 6, 2012, makes it significantly easier for employers to make deductions from wages. Under the new law, an employer will be able to make deductions for overpayments of wages or to recoup an advance of salary or wages (new regulations will be issued by the New York Department of Labor explaining exactly how this can be done). Additionally, so long as it is authorized in writing by the employee, employers may make deductions for items such as prepaid legal plans, parking passes, health club dues, day care expenses, and certain other employer-provided benefits.
Significantly, the new law will “sunset” on November 6, 2015, meaning that its provisions automatically expire on that date unless extended by the legislature. Hopefully, the changes will be well received by both the employer and employee community, meaning that the legislature will extend the law.
By Eric Paltell