Governor Cuomo Signs Law Establishing Additional Categories Of Permissible Wage Deductions For New York Employers

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On Friday, September 7, Governor Cuomo signed a law that will allow New York employers to make additional types of deductions from employee pay with the employee’s consent. Bill A10785-2011 (Assembly), S7790-2011 (Senate). The law, with some restrictions, also permits employers to use wage deductions (1) to recapture over-payments of wages due to clerical errors and (2) for repayment of wage advances given to employees.

Deductions for the Benefit of the Employee -

The existing New York Labor Law § 193 strictly limits the types of deductions employers may take. It permits only deductions “made in accordance with the provisions of any law or governmental agency’s rule or regulation,” as well as deductions authorized by the employee and 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 benefit of the employee.” NYLL § 19 (a)-(b). The New York Court of Appeals construed “similar payments” very narrowly in a pair of cases, barring employers from making almost any deduction other than those listed above – even if the employee desired it. See Angello v. Labor Ready, Inc., 7 N.Y.3d 579 (2006); Marsh v. Prudential Securities, Inc., 1 N.Y.3d 146 (2003).

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