New York Wage Deduction Rules
Due to 2010 opinion letters issued by the New York State Department of Labor (NYS DOL) and Section 193 of the New York State Labor Law, New York employers should not deduct the following from wages, even if the employee authorizes such deductions in writing:
- Repayment of advances, debts, or loans (except 401k loans)
- Overpayment of wages
- Advances of unearned vacation/PTO pay
- Tuition assistance and the like, such as the cost of company-required training
- Recovery of employment-related expenses
- Recovery for spoilage or breakage
- Purchases made from employers or employer-sponsored stores, cafeterias, and like establishments
- Cash register shortages
In addition to prohibiting deductions from wages, Section 193 also prohibits employers from requiring employees to make payments by separate transactions (such as asking an employee to pay by check) if such payments would not be permitted as wage deductions. According to the NYS DOL, "any employer induced or requested action which, if refused, could result in disciplinary or retaliatory action [is] a prohibited separate transaction. However, where the employer merely requests that the employee separately pay such money overpaid (i.e. accidentally overpaying an employee), such an action will not be considered to be a prohibited separate transaction so long as the employer clearly communicates that the employee's refusal will not, in any way, result in any form of disciplinary or retaliatory action."
The NYS DOL also stated that "employers may seek relief in a separate proceeding against the employee, i.e. an action in civil court." Although not expressly stated in the recent opinion letters, employers should still be able to recoup such unearned monies from non-"wage" payments due to employees (provided, among other things, that the employers have appropriate policies in place).
Suggested Action
Employers in New York should review their policies and practices to ensure that they do not provide for impermissible deductions from "wages". For further information, if you are an HR Works helpline client feel free to contact the helpline at (585) 381-8340 x1 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
