On September 7, 2012, Governor Cuomo signed legislation amending New York Labor Law §193. The amendment goes into effect on November 6, 2012. Section 193 of the New York Labor Law prohibits employers from making “any deduction from the wages of an employee,” except for (1) deductions required by law or (2) deductions that are expressly authorized by the employee in writing and “are for the benefit of the employee.” The second exception permits deductions for insurance premiums, pension or health benefits, charitable contributions, and dues for labor organizations, as well as other limited deductions.
The amendment expands the list of categories for which deductions may be taken by employers with an employee’s 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.
The permissible deductions under the amendment shall now include the following:
● prepaid legal plans;
● purchases made at events sponsored by a charitable organization affiliated with the employer;
● discounted parking or discounted passes, tokens, fare cards, vouchers, or other items that entitle the employee to use mass transit;
● fitness center, health club, and/or gym membership dues;
● cafeteria and vending machine purchases made at the employer’s place of business, and purchases made at gift shops operated by the employer (if the employer is a hospital, college, or university);
● pharmacy purchases made at the employer’s place of business;
● tuition, room, board, and fees for pre-school, nursery, primary, secondary, and/or post-secondary educational institutions;
● day care, before-school and after-school care expenses;
● payments for housing provided at no more than market rates by non-profit hospitals or affiliates thereof; and
● similar payments for the benefit of the employee.
Most significantly, the amendment allows employers to 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 “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, signed by the employee and if the deductions are, generally, for the benefit of the employee. 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.”