Sep 14, 2012 Wage & Hour Issues

Governor Cuomo Signs Amendment to NY Labor Law on Wage Deductions

Governor Cuomo has signed into law an amendment to Section 193 of New York Labor Law to allow employers to make deductions from paychecks that had previously been prohibited under the Labor Law.  (See /articles-443.html)   The amended law will become effective on November 6, 2012. 

Previously, New York employers could only make deductions from wages that were required by law (e.g., for taxes) or that were “for the benefit of the employee.”  The New York Department of Labor narrowly interpreted what was for the “benefit of the employee,” limiting deductions to items such as insurance premiums and pension, health, and welfare benefit contributions.  Under the amended Section 193, employers in New York will be permitted to make deductions from employees’ wages for repayment of pay advances and accidental overpayments of wages.  Employers will also be able to deduct for things like daycare expenses, United States bonds, events sponsored by bona fide charitable organizations, gym dues, tuition, and related academic expenses, and housing payments.

It will be up to the employer’s discretion to determine whether to offer such permissible deductions.  Once an employer offers a deduction, however, employees must sign and date written authorizations before any deductions can be made.  Employers will be required to provide employees with written notification of the full terms and conditions of the payment and the full details of any deduction.

The changes in the law are set to expire three years following their effective date unless further legislative action is taken.