On June 21, 2012, the New York State Legislature passed Bill A10875-2011 (the "Bill"), which enumerates a host of new, permissible wage deductions from employee paychecks. The Bill will likely be signed into law by Governor Andrew M. Cuomo, who published a memorandum in support of the legislation. Governor Cuomo's statement in support of the Bill notes that employers' inability to make deductions for valuable services provided to employees is disadvantageous to both the employer and the employee. The law presently permits deductions under two circumstances only: (1) as otherwise authorized by law (e.g., tax withholdings or Medicare contributions) and (2) the narrow, statutorily enumerated deductions in Section 193 of the New York Labor Law (e.g., charitable organizations, labor organization dues, insurance premiums, and retirement contributions).
The newly enumerated deductions are numerous and include, but are not limited to, the following: parking passes or mass transit vouchers; gym membership dues; certain purchases made by the employee, such as cafeteria or vending machine purchases at the employer's place of business; tuition, room and board fees; and day care expenses.
Additionally, the new amendments allow employers to make deductions to recover an overpayment of wages that is due to mathematical or other clerical errors, and to recoup salary or wage advances. Wage deductions related to overpayments and repayments of wages must comply with additional regulations promulgated by the New York Department of Labor ("NYDOL") (addressing, e.g., the timing, frequency, duration, and method of recovery; heightened notice requirements; and implementation of an employee-dispute system).
The recent amendments are a welcome change for New York employers, as state courts and NYDOL Opinion Letters have consistently taken a narrow approach to the deductions enumerated in Section 193. The legislation will take effect 60 days following Governor Cuomo's enactment. All wage deductions require a voluntary, written employee authorization, which may be freely revoked. Employers should note that the law will expire three years following the date of enactment, should no further legislative action be taken. Further, given additional requirements that will be promulgated from time to time by the NYDOL, employers should continue to closely monitor the legislation's upcoming activity.
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