Paycheck Deductions: What Is Legal in New York?

Understanding NY Laws about Paycheck Deductions Laws vary from state to state regarding deducting for loans or legitimate business losses from an employee’s paycheck. New York has very strict labor laws regarding this, stricter than laws in many other states. In addition, current guidelines have changed from what they were in the past. Guidelines Regarding NY Paycheck Deductions New York State Labor Law provides guidelines that list what paycheck deductions are legal. After receiving notice of all terms and conditions of the payment/benefits and details about the manner in which the deductions will be made, employees must voluntarily authorize the deductions in writing. Authorized deductions include: Insurance premiums and prepaid legal plans Pension or health and welfare benefits Contributions to a bona fide charitable organization Purchases made at events sponsored by a bona fide charitable organization affiliated with the employer when 20 percent of the event’s profits are being contributed to a bona fide charitable organization U.S. bonds Dues or assessment to a labor organization Discounted parking or passes, tokens, fare cards, vouchers or items that enable mass transit for the employee Fitness center, health club, and/or gym membership dues Cafeteria and vending machine purchases made at the employer’s place of business and purchases at gift shops operated by the employer, where the employer is a hospital, college or university Pharmacy purchases made at the employer’s place of business Tuition, room, board and fees for pre-school, nursery, primary, secondary, and/or post-secondary educational institutions Day care, before-school and after-school care expenses Payments for housing provided at no more than market rates by non-profit hospitals or affiliates Similar payments for the...

What Should You Do If an Employee Sues Your Company?

Guidelines for Dealing with Lawsuits As the saying goes, knowledge is power, and knowing what steps are important to take when facing a lawsuit can help you take effective and quick action to protect your interests. Consult with an Employment Defense Lawyer The first and most important step to take is to review the lawsuit with an experienced employment defense attorney. You can learn more about your legal rights and find out the best way to deal with the lawsuit. Your attorney will have you preserve any documentation or records that relate to the case, which could include the following: Written documents Reports Emails Web pages Photos Videos Voice messages Text messages Any other electronic communications Do Not Personally Communicate with the Plaintiff Once an employee has filed a lawsuit, direct contact with the plaintiff about the lawsuit is not wise because anything you say could be misconstrued or used against you. You should have your employment defense attorney handle all communications with the plaintiff’s attorney. Consult with Your Insurance Agent Many lawsuits fall under the umbrella of a liability insurance policy, depending on what your policy covers. For example, employment practices liability insurance frequently covers a lawsuit and pays for attorney’s fees, court costs and a settlement or judgment. Do Not Ignore the Lawsuit and Take Action Right Away The worst thing you could do is to ignore the lawsuit, hoping it will go away. Time limitations exist for lawsuits, and ignoring the lawsuit could lead to the plaintiff filing for a Request for Default. A Request for Default would result in the plaintiff automatically winning the case...

Company Security and Surveillance: Where Should Employers Draw the Line?

Are Your Security and Surveillance Policies Violating Privacy Laws? Companies have the right to protect against internal theft or property destruction. They also have a responsibility to evaluate productivity and ensure their resources are used efficiently and effectively. If a company faces litigation, gathering evidence becomes a priority. As a means of gathering information, companies often use surveillance systems, whether gathering information related to production, theft, property damage, or for litigation purposes. Types of Surveillance Installing cameras for video surveillance is one approach to surveillance. Putting GPS tracking on company vehicles is another form. Monitoring software is also available to install in company computers and cell phones. What Types of Legal Precautions Should You Take? According to Business News Daily, employers should post signage, which states that the premises are monitored by security cameras. For computer monitoring, when the employee uses a company device, there are virtually no ramifications for installing monitoring software to monitor what employees are doing at work. Employers have the right to know whether the employee is working on tasks related to the job and what tasks are getting done. It is better for employers to require that employees use the business’s computers because they would not have the same right to install monitoring software on a device the employee owns. Where employers can run into trouble is when they acquire too much information of a private nature. Finding out an employee’s medical information would violate HIPPA or could lead to a lawsuit that claimed violation of the Genetic Information Act. Spying on employees who are exercising their right to discuss unionizing, collective bargaining, wages...

What Employers Should Know About Retaliation Claims

Retaliation Claims May Include Emotional Distress Damages A precedent has been set in relation to retaliation claims brought against employers. Two courts of appeals, the Sixth and Seventh Circuit Court of Appeals had both ruled that employees have the right to recover for emotional distress damages in retaliation claims brought under the Fair Labor Standards Act (FSLA). The National Law Review reported that a third court, the Fifth Circuit Court of Appeals also delivered the same ruling regarding damages for emotional distress. What Are the Case Details in This Third Ruling? A maintenance man, Santiago Pineda, while working for an apartment complex owned by JTCH Apartments, LLC received discounted rent as part of his compensation for doing apartment maintenance. After Pineda sought unpaid overtime, he and his wife received notice to vacate the apartments with the reason being given that they had failed to pay rent. JTCH at that point was claiming Pineda owed rent for the course of his employment. Pineda sued for damages based on the eviction and demand for back rent. He also entered an appeal regarding the district court’s failure to instruct the jury about his ability to claim damages for emotional distress related to his retaliation claim. The Fifth Court of Appeals ruled that the court was in error when declining to instruct the jury regarding Pineda’s right to damages for emotional distress, and it reversed and remanded the case for trial so the jury could decide on this potential damage. How Could the Ruling About Retaliation Claims Impact Employers? Employers should be aware that employees who also file for emotional distress damages could...

Guidelines for Classifying Workers as Independent Contractors or Employees

Why is worker classification important? If a worker is an employee, you as the employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on the wages paid to the worker. Workers who are independent contractors are responsible for paying their own Social Security and Medicare taxes, which is called self-employment tax. The employer pays half of the employee’s self-employment tax and the employee pays the other half. Independent contractors pay the full amount of self-employment tax themselves. What Factors Determine Whether a Worker is an Independent Contractor or Employee? According to the IRS website, the three main factors that help an employer decide whether a worker is an employee or independent contractor are: Behavioral control Financial control Relationship How Does Behavioral Control Factor into Work Status? The employer has more control over an employee than an independent contractor. Control includes factors such as instructing the worker when and where to do work, specifying what tools to use or where to buy tools. Employees receive detailed instruction and employers may have evaluation systems in place to measure the end result of their work. Also employees often receive job training that specifies procedures and methods to be used. This is true whether the training is periodic or ongoing. How Does Financial Control Affect Work Status? Examples of financial control that would apply to employees are substantial investment in the worker’s equipment, reimbursed expenses, no opportunity for profit or loss, and method of payment, such as a regular wage for hourly, weekly or some other time period payment. Even when the employer supplements pay by commissions, workers...

Misclassifying Workers as Independent Contractors

How Would Your Small Business Fare with the IRS for Worker Status? Did you know that misclassifying workers is one of the top problems that small business owners face? Many small businesses hire independent contractors as part of running their businesses and delivering services or products. It is vital for employers to ensure that they classify workers correctly. What Can Happen as Result of Misclassifying Workers as Independent Contractors? The IRS website explains that misclassified workers can file a Social Security Tax Form 8919. Form 8919 is a request for uncollected Social Security and Medicare taxes due on their compensation. In other words, the employer could owe a considerable amount of compensation to the worker because the worker paid the Social Security and Medicare taxes instead of the employer, due to the fact the worker was misclassified as an independent contractor. What Recourse Do You Have If You Believe the Worker Has Not Been Misclassified? The IRS recognizes the fact that you may have had a reasonable basis for classifying a worker as an independent contractor and not as an employee. Therefore, relief provisions are granted in such cases. However, you must file all the necessary federal information returns to establish your basis for relief. (See section 530 Employment Tax Relief Requirements). What is the Voluntary Classification Settlement Program? The Voluntary Classification Settlement Program (VCSP) offers employers the option of reclassifying workers as employees for future tax periods. It also provides partial relief from federal employment taxes when the employers agree to classify their workers or a class or group of workers as employees. Employers must meet certain eligibility...