4 minute read | October.14.2013
Almost one year after the New York Labor Law was amended to expand the scope of permissible wage deductions, on October 9, 2013, the New York Department of Labor has finally issued regulations that allow employers to take advantage of the changes to the law.
Among the information provided in the very detailed final regulations, the New York Department of Labor clarifies what it means for a deduction to be “authorized” by an employee. Specifically, the regulations state that to be a valid authorization, it must be in writing and provide all of the terms and conditions of the deductions, its benefits, and the details of the manner in which deductions shall be made. The employee must have the opportunity to review the notice before any deductions are made or there are any changes in the amount of the deduction or a substantial change in the benefits of a deduction (which the New York Department of Labor would view as any increase to the amount of the deduction). A single written authorization can be used to cover more than one deduction.
What is probably most interesting to employers, however, are the regulations dealing with overpayments and salary advances. While last year’s amendments stated that employers would be able to take wage deductions to recoup overpayments of wages if an employee was overpaid due to a mathematical or other clerical error and for repayments on advances of salary or wages, the law specified that the New York State Department of Labor would issue regulations to address the scope of these provisions. With the recently issued regulations, employers can now start taking these deductions.
Deductions for Wage Overpayments
Deductions for Salary Advances
While the regulations are cumbersome, employers can now gain some comfort around how they can lawfully take wage deductions and recover wage overpayments and salary advances without running afoul to the Labor Law. However, given how rigidly the wage deduction law had been interpreted by the New York State Department of Labor before the amendments, it would be prudent for employers to strictly comply with the regulations in making these now permissible wage deductions.