New York Department of Labor Clarifies Wage Deduction Rules

The New York Department of Labor recently published new interpretive guidance pertaining to Labor Law Section 193, which relates to deductions from wages. Consistent with recent opinion letters, in which the Department stated that the law did not permit deductions for overpayments or salary advances, the Department again took a restrictive view of permissible deductions under that statute.

According to the new guidance, employers may only make deductions from an employee’s pay when: (1) the law requires it, as with state and federal taxes, or (2) the deductions are expressly authorized in writing by the employee and are for payments for insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, payments for U.S. bonds, payments for dues or assessments to a labor organization, and similar payments for the benefit of the employee. According to the Department, the term “similar payments for the benefit of the employee” is to be construed narrowly, and does not authorize deductions for any of the following reasons:

• Overpayments;
• Salary advances;
• Repayment of loans, advances or debts;
• Recovery of employment-related expenses;
• Recovery for spoilage or breakage;
• Purchases made from employers or employer-sponsored stores, cafeterias, and similar establishments; or
• Cash register shortages.

Click here to view the Department’s new publication.