Pay Deductions – Can You Do It?
Today, we want to talk about wage deductions.
What’s allowed and what’s not in New York State?
Although the Legislature and the New York Department of Labor’s Division of Labor Standards has outlined when this can be done, often the words are confusing and dense.
We’re here to tell you about it in plain language.
Lawful Wage Deductions
All the word “lawful” means is in compliance with the law. Stated differently, lawful wage deductions are the kinds of things that an employer is allowed to take out of its employee’s paycheck, so long as it’s done correctly.
In section 193 of the New York Labor Law, for example, the law breaks down the kinds of wage deductions that are permitted:
- Deductions set as a law or rule by a government agency;
- Deductions that are clearly approved in writing by the employee and are for the employee’s benefit (and which are specified in section 193 of the Labor Law);
- Deductions related to the recovery of overpayment because of a mathematical or clerical error by the employer; and
- Deductions for the repayment of advances of salary and wages made by employer.
Unlawful Wage Deductions
All the same, there are other deductions that the State says are plainly unlawful. That is, employers shouldn’t deduct money from someone’s paycheck because of these things. They include but aren’t limited to:
- Repayments of loans, advances, and overpayments that aren’t compliant with Labor Department regulations;
- Employment purchases of tools, equipment and work uniforms;
- Employment losses (cash shortages, fines, breakage and spoilage);
- Penalties for tardiness, excessive leave, misconduct, quitting without notice;
- Contributions to political action committees; and
- Employer’s administrative costs.
Notifying Employees
The New York Department of Labor requires employers to follow specific steps before a deduction can properly be authorized. One critical step is to inform the employee. Another critical step is to obtain the employee’s agreement.
All notices, authorizations, responses, replies or determinations required to be given should be in writing. The law recognizes that email generally is an acceptable way to provide notice.
Whether it’s an email, note, letter, or another notice, employers must use ordinary language that can be easily read and understood. All notices have to use at least a 12-point font – they can’t be in teeny tiny typeface.
Keeping and Maintaining Records
In most cases, notices also must be signed by the employee.
Be sure to keep a record of any authorization for at least six years after an employee’s employment ends.
If you’re confused about these rules, or if you have any questions, feel free to reach out to us at either 716.839.9700 or info@coppolalegal.com. We’re here to help.
