Employers in New York have limited ability to make deductions from employee wages. Deductions from an employee's wages can only be made if the law specifically allows such deductions and if the employee has provided the employer with advanced written authorization.
Permissible Deductions
Section 193 of the New York Labor Law provides guidance on which deductions are permitted from an employee's wages. Permitted deductions include:
- insurance premiums and "prepaid legal plans";
- pension or health and welfare benefits;
- payments to charitable organizations;
- fitness center, health club, and/or gym membership dues;
- payments for dues to a labor organization; and
- similar payments for the benefit of the employee.
Employers cannot make deductions for lost, stolen, or destroyed property or equipment. However, employers may discipline, terminate or sue the employee for the losses and/or damages.
Wage deductions for advances in salary or commissions are permissible but the employee's pay plan must specify how and when the advances are repaid. Wage deductions for advances are not permissible when interest is charged to the employee on the advances (e.g., loans).
Lastly, employers cannot circumvent the law and require an employee to make a payment to the employer by a separate personal check unless the reason for the deduction is permitted under the law. Otherwise this will be considered an improper
wage deduction.
Authorizations for Wage Deductions
Prior to withholding any wage deductions, employers must first obtain a written authorization from the employee. The authorization can be obtained through a written agreement between the employee and employer or through a collective bargaining agreement.
The authorization from the employee must provide notice of all terms and conditions of the deduction, the purpose for the deduction, and the details of the manner in which the deduction will be made.
Wage
Overpayments
Wage deductions for overpayments are permitted, so long as the overpayment was due to the employer's mathematical or clerical errors and the employer first provides the employee with a written notice to make the deduction.
For deductions due to overpayments employers must develop and follow a dispute procedure by which the employee may dispute the overpayment or terms of recovery, seek a delay in the recovery of such overpayment, or dispute the amount and frequency of deductions that are not made in accordance with the terms of an authorization for such advance.
