New York Eases Rules on Deductions from Employee Wages


New York employers will soon be able to make deductions from their employees’ wages, with the employees’ consent, for reimbursement of advances, inadvertent overpayments of wages and in payment for purchases of employer-provided goods and services under a recently passed amendment to New York’s strict wage deduction law. Until now New York’s wage deduction law, N.Y. Labor Law §193, broadly prohibited employers from making any and all deductions from employees’ wages, with two limited exceptions for:

• Deductions authorized or required by law (e.g., social security or Medicare contributions, tax withholding and wage garnishment for child support); and

• Deductions authorized by the employee that are “for the benefit of the employee.”

The latter exception to the wage deduction law has been narrowly construed by the New York State Department of Labor (“NYSDOL”) to include only deductions for insurance premiums, contributions for pension, health or welfare benefits, contributions to charitable organizations, payments for U.S. Bonds, payments for dues or assessments to unions and similar payments, so long as they do not exceed 10 percent of the employee’s gross wages for the pay period. See NYSDOL Counsel Opinion Letter RO- 09-0152 (January 21, 2010).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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