Thanks Albany: Labor Law Amendment Expands Permissible Deductions From Employees' Wages
Some unexpected but welcome news for New York State employers: an amendment to the Labor Law that loosens restrictions on employers’ ability to make authorized deductions from employees’ wages.
On June 21, the Legislature passed an extensive revision to Section 193 of the Labor Law that establishes a host of new grounds for wage deductions. Of most significance to employers are provisions that would allow them to recoup pay advances and inadvertent overpayments. Under the prior law, deductions were allowed for only a few enumerated reasons.
The provisions regarding recovery of overpayments and pay advances will not take effect until the State DOL issues regulations governing the timing, frequency, and other aspects of such deductions. The agency will also be required to impose notice and dispute-resolution requirements for these deductions.
The amendment would also permit employers to make deductions for:
- events sponsored by charitable organizations;
- discounted passes for mass transit or parking;
- gym membership dues;
- cafeteria, vending machine and pharmacy purchases made at the employer’s place of business;
- tuition for educational institutions;
- day care expenses; and
- payments for housing provided at no more than market rates by non-profit hospitals.
Governor Andrew Cuomo is expected to sign the bill into law soon, and it will take effect 60 days later. But the law also contains an unusual “sunset” clause under which the amendments expire three years after the effective date. It remains to be seen whether what one Legislature gives, a later Legislature takes away.
Co-authored by Robert Whitman and Carlos Lopez