New Bill Permits Additional Wage Deductions for New York Employers

On September 8, 2012, New York Governor Andrew Cuomo issued a bill that amended New York Labor Law § 193 (“the Amendment”).  Previously, New York employers had limited deductions they could make legally from their employee’s wages (taxes, health insurance premiums, union dues, etc.).  The Amendment, which goes into effect on November 7, 2012, provides additional deductions employers may make against their employee’s wages.  Since the Amendment makes the wage deduction law less restrictive, both employers and employees should benefit.   

The Amendment will now permit deductions for accidental overpayments to employees which had previously been prohibited.  In addition, the Amendment now permits deductions for the re-payment of salary advances.   Previously, this practice was prohibited.   Before making any deductions, employers must comply with the applicable provisions that relate to the timing, frequency and actual size of the deductions from wages.  Employers must also obtain their employees’ written permission prior to making any of these deductions and give notice before changing the amount of any deductions from pay (including those for benefits).

Other deductions from employee wages now permitted under the Amendment include:  

·         day care expenses

·         prepaid legal plans

·         health club or gym membership

·         discounted parking or mass transit expenses    

·         payments for certain housing provided by non-profit hospitals and affiliates

·         tuition, room, board and fees for pre-school, nursery, primary, secondary, and/or post-secondary educational institutions

While overall the Amendment will make life easier for employers, a few precautionary words.  First, as previously noted, the Amendment does not go into effect until November 7, 2012.  Accordingly, employers cannot make any of these deductions prior to November 7th.  Second, the Amendment has a set expiration date:  November 7, 2015.  Therefore, employers should put a reminder in their calendars in the summer of 2015 to ascertain whether the New York legislature will renew the Amendment.  Third, employers must keep a record of their employees written deduction authorizations throughout their employment and six years after that employment ends.  Finally, employees have the right to revoke their authorization at any time.  Accordingly, in such a circumstance, the employer must cease the deductions no later than four pay periods or eight weeks after authorization has been revoked, whichever falls earlier.