United States: New York Eases Rules On Deductions From Employee Wages

New York employers will soon be able to make deductions from their employees' wages, with the employees' consent, for reimbursement of advances, inadvertent overpayments of wages and in payment for purchases of employer-provided goods and services under a recently passed amendment to New York's strict wage deduction law.

Until now New York's wage deduction law, N.Y. Labor Law §193, broadly prohibited employers from making any and all deductions from employees' wages, with two limited exceptions for:

  • Deductions authorized or required by law (e.g., social security or Medicare contributions, tax withholding and wage garnishment for child support); and
  • Deductions authorized by the employee that are "for the benefit of the employee."

The latter exception to the wage deduction law has been narrowly construed by the New York State Department of Labor ("NYSDOL") to include only deductions for insurance premiums, contributions for pension, health or welfare benefits, contributions to charitable organizations, payments for U.S. Bonds, payments for dues or assessments to unions and similar payments, so long as they do not exceed 10 percent of the employee's gross wages for the pay period. See NYSDOL Counsel Opinion Letter RO-09-0152 (January 21, 2010).1

Citing the disadvantages these severe restrictions create for both employers and employees, the New York Legislature last month passed N.Y. State Assembly Bill No. A10785-2011 (the "Amendment") which expands the categories of deductions employers may take from employees' wages upon receipt of written consent. The Amendment was signed by Governor Cuomo on September 7, 2012 and will be effective on November 6, 2012. The Amendment will expire after three years unless expressly extended by the Legislature. Its essential features are described below.

Payments for Employer-Provided Goods and Services

The Amendment enlarges the list of deductions considered "for the benefit of the employee" and permits employees to consent to periodic deductions from their wages to pay for goods and services provided by their employer for the convenience of its employees. This expanded list includes:

  • Costs associated with discounted parking or mass transit tickets, passes, vouchers or fare cards;
  • Fitness or health club and/or gym membership dues;
  • Purchases made at cafeterias, vending machines and pharmacies at the employer's place of business, and at gifts shops run by hospitals, colleges and universities;
  • Tuition, room, board and fees for pre-school nursery, primary, secondary and post-secondary education;
  • Day care and before-school and after-school care expenses; and
  • Payments of a similar kind made for the benefit of the employee.

Recovery of Advances and Inadvertent Overpayments

Departing significantly from the prior law, the Amendment authorizes employers to make deductions from employee wages to recoup advances to employees and repay wage overpayments made unintentionally due to employer mathematical or clerical error. However, any such deductions will have to comply with regulations to be promulgated by the NYSDOL. Those forthcoming rules will prescribe the kinds of deductions permitted, the time, frequency, duration and method of recovery or repayment, limitations on the amount that can be deducted per pay period and the notice that must be given to employees before deductions commence, including notice of procedures for disputing any overpayments or delaying the start of recovery.

Written Notice and Authorization Required

As under the prior law, the Amendment permits employers to make deductions from employees' wages only if expressly authorized in writing by affected employees. The Amendment also requires employers to provide written notice to its affected employees of all terms and conditions of the deductions to be made, including the reason for the deductions and the manner in which they will be made. In addition, while an employer is making deductions it must provide employees with regular updates regarding the deductions, including a running total of all deductions made from wages in a pay period and any changes it will make to the terms and conditions of the deductions.

Employers are required to retain employee written authorizations for deductions for at least six years following the termination of employment. Except for wage deductions required by a collective bargaining agreement, an employee can revoke his or her consent to wage deductions in writing at any time. Upon receipt of a revocation, an employer must cease making wage deductions as soon as practicable, but no later than four pay periods or eight weeks after the employee's consent is withdrawn, whichever is sooner. Reimbursement of any money still due and owing from the employee at this point must be collected by other means, as under current law — i.e., voluntary payments by the employee, deduction from non-wage payments such as expense reimbursements or, as a last resort, through legal proceedings.

What this Means for You

Employers interested in utilizing the Amendment to make newly authorized wage deductions should be cognizant of its November 6 effective date and of its November 5, 2015 expiration date (unless extended by the Legislature). Interested employers also should watch for publication of the regulations due from the NYSDOL which, in addition to providing necessary detail, also should provide or describe the content of the required employee notices and consent forms.

Employers should be mindful of the ease with which employees can revoke their consent to making deductions at any time when considering limits to fix on the value of goods or services that they will provide, subject to reimbursement, for their employees' benefit. Likewise, plans should be developed to respond to revocation of an employee's consent to deduct where a considerable balance remains on the repayment amount due.


1. Available online at http://www.labor.ny.gov/legal/counsel-opinion-letters.shtm.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Herrick, Feinstein LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Herrick, Feinstein LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions