Wage Deductions in New York

An employer may not deduct any money from an employee’s paycheck unless the employee has voluntarily authorized the deduction in writing and the deduction is for the employees own benefit. Section 193 of the New York Labor Law prohibits employers from making any deduction from the wages of an employee, with two exceptions: (1) deductions required by law or (2) deductions that are expressly authorized by the employee in writing and that are for the benefit of the employee.Permitted wage deductions are generally limited to insurance premiums, health and welfare benefits, charitable contributions, union dues or fees, and similar payments for the benefit of the employee. An employer may not deduct from an employee's paycheck any costs related to breakage, spoilage, cash shortages, or similar alleged damages.

On November 6, 2012, certain amendments to Section 193 took initially effect which expiration date has now been extended for an additional three-year period to November 6, 2018 . The amendment expands the list of categories for which deductions may be taken by employers with an employees written consent and allows deductions for overpayments due to clerical or mathematical errors or for repayment of advances on wages or vacations paid to employees. Significantly, the amended law also allows employers to (1) make wage deductions to recover an overpayment of wages where such overpayment is due to a mathematical or other clerical error by the employer and (2) repayment of advances of salary or wages made by the employer to the employee.

Under the amended law, deductions still are permitted only if expressly authorized in writing by the employee and if the deductions are, generally, for the benefit of the employee. The employer must retain each authorization for at least six years following the termination of the employee’s employment. The amendment requires that, before any deduction is made, the employee must receive written notice of all terms and conditions of the payment and/or its benefits and the details of the manner in which deductions will be made.

Further, the employer must provide the employee with information regarding deductions and an updated total of all deductions from the employee’s wages. Employees have the right to revoke authorization for any or all wage deductions at any time, and employers are required to cease those deductions as soon as possible.

The NYSDOL has issued regulations on the timing, frequency, and notice requirements for these deductions, including a procedure that the employee may use to dispute the amount of the deduction.

If you have any questions or need more information concerning your specific wage and hour issues, please call us at (914) 949-2700 or use our email form to get in touch with New York Labor and Employment Attorneys.