United States: Eagerly Anticipated Proposed Wage Deduction Regulations Announced By New York State DOL

Last week, the New York Department of Labor ("DOL") published proposed regulations governing the new categories of permissible wage deductions in Section 193 of the New York Labor Law that took effect in November 2012. The law was amended to allow: (1) new types of deductions made for the benefit of the employee, (2) deductions made to recapture overpayments of wages due to employer error, and (3) deductions made to repay wage advances given to employees. We detailed the revisions to the law in a September 2012 Alert available here. When finalized, the regulations governing these deductions will be codified at 12 N.Y.C.R.R. 195.

Deductions for the Benefit of the Employee

The amended Section 193 created a number of new permissible wage deductions for the benefit of employees, including those made for discounted parking passes or fare cards, gym membership dues, cafeteria purchases, and day care expenses, among others. It also permitted "similar payments for the benefit of the employee," but did not describe those payments.

The proposed regulations make clear that deductions for the benefit of the employee include only (1) items explicitly listed in Section 193 or (2) items in one of six categories that correspond to those listed deductions:

  • Health and Welfare Benefits (e.g., insurance premiums, gym memberships, and day care)
  • Pension and Savings Benefits (e.g., pension benefits and U.S. bonds)
  • Charitable Benefits (e.g., charitable contributions)
  • Representational Benefits (e.g., labor dues)
  • Transportation Benefits (e.g., parking passes and fare cards)
  • Food and Lodging Benefits (e.g., cafeteria and vending machine purchases)  

Deductions made for fines for misconduct or tardiness, political contributions, or for recoupment of unauthorized employee expenses, among other things, remain impermissible.

All deductions made for the benefit of the employee must be authorized in advance by the employee in a written agreement (electronic or hard copy) that is express, voluntary, and informed. Oral notice or authorization is insufficient for all deductions permitted by Section 193. For an authorization to be informed, before it is executed, the employee must be provided with written notice of the deduction's terms and conditions, the benefit to which it is related, and the manner in which deductions will be made. That written notice must be provided any time the amount of the deduction changes or there is a "substantial change" in the benefits provided (including any reduction of benefits). For deductions made for cafeteria or similar purchases that may fluctuate from one pay period to the next, the notice should list a deduction range that includes a ceiling for a single pay period.

Deductions for Overpayments

Employers will also be able to make deductions to recover overpayments made due to the employer's mathematical or clerical error. The proposed regulations require the employer to first provide notice to the employee of its intent to make the deduction(s). This notice must be given within eight weeks of the employer's overpayment. Deductions can be made no more frequently than once per wage payment, and recovery can come in the form of a wage deduction or a separate transaction.

For overpayments that are equal to or less than "the net wages earned after other permissible deductions in the next wage period," the employer may recover the entire overpayment amount in the next wage payment. Before doing so, it must give at least three days' notice to the employee.

For overpayments that exceed a single payment of net wages, deductions (1) may not exceed 12.5% of the gross wages earned in that pay period, and (2) may not reduce the effective hourly wage below the minimum wage (which will increase from $7.25 to $8.00 on December 31, 2013). Before beginning these deductions, the employer must provide at least three weeks' notice to the employee.

Employers must also implement a procedure under which the employee may dispute the overpayment and terms of recovery (the proposed regulations include a number of specific process requirements). An employee has two days to respond to the employer's notice in the case of overpayments equal to or less than a single payment of net wages; he or she has one week to respond to a notice of an overpayment exceeding this amount. If the employee does protest, the employer must not make the deduction until at least three weeks after the process concludes. The failure to afford this process to the employee creates the presumption that the contested deduction was impermissible.

Deductions for Wage Advances

Finally, the draft regulations allow employers to make deductions for wage advances given to employees. The employer and employee must agree in writing to the amount to be advanced, the deduction amount (in total and per wage payment), and the date(s) on which each deduction will be made. The authorization must also include notice to the employee that he or she may contest deductions that are not taken in accordance with the authorization's terms. If the wage advance is accompanied by interest or a fee or fees, it is not an advance under the Labor Law and cannot be recovered via wage deductions.

Employers may recover advances by making deductions no less frequently than each wage payment. Advances may be recovered through wage deductions or a separate transaction. If an employee is terminated or leaves the organization prior to the advance being repaid, and the written authorization allows for it, the remaining advance can be recovered through a larger deduction from the last wage payment.

Once the employee has taken the advance, he or she may not revoke his or her deduction authorization. And an employee cannot be given a second wage advance until the first has been repaid in full.

As with deductions for overpayments, employers must implement a dispute procedure that allows the employee to dispute the amount and frequency of deductions that are not permitted by the authorization. The employee must be able to provide written notice of his or her objection, and the employer must reply in writing "as soon as practical." If an employee protests the deductions under this procedure, the employer must cease its deductions until it has replied to the employee. The failure to afford this process to the employee creates the presumption that the contested deduction is impermissible.

The full text of the proposed regulations is available here. Public comments on the proposed regulations can be sent to regulations@labor.ny.gov through July 6, 2013.

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