Amendment to New York’s Labor Law Expands the Universe of Permissible Wage Deductions

The New York State Legislature recently passed a bill amending New York Labor Law Section 193 and establishing new categories of permissible wage deductions that employers may take with the consent of employees. In addition to allowing employers (with employee consent) to recoup advances on wages or accidental overpayments, the new amendments also permit employee-approved deductions for things such as discounted mass transit tickets; gym membership dues; cafeteria or pharmacy purchases made at the employer’s place of business; and education and child care expenses. Both employers and employees are expected to benefit from the flexibility permitted by the bill, although implementing regulations from the New York Department of Labor have yet to be enacted.

With respect to deductions related to recovering accidental overpayments of wages or wage advancements, the bill instructs the New York Department of Labor to issue regulations governing the periodic amount of recovery or repayment; the timing, frequency, duration and method of recovery or repayment; a requirement that notice to be provided to employees before commencing the recovery or repayment; and a requirement that employers implement procedures for disputing the amount of overpayment or repayment or seeking to delay commencement of repayment or recovery. Employers are advised to wait until these regulations are enacted before acting on the bill, and should also take care to ensure compliance with the bill’s new record keeping requirements.

The amendment is expected to be signed into law by Governor Andrew Cuomo and will become effective 60 days after enactment. The bill contains a sunset provision, which provides that the law shall expire and be deemed repealed three years after the effective date. The text of the bill is available here.

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