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 benefit of the employee
- Recovery of overpayment of wages due to mathematical or clerical error
- Repayment of advances of salary or wages made by the employer to the employee
- Deductions based on an employer sponsored pre-tax contribution plan approved by the IRS or local taxing authority
It is also important to notice what types of deductions are not valid: uniforms, purchases of tools and equipment for work, breakage losses, tardiness or misconduct fines and contributions to political campaigns. (New York Labor Law Part 195 Deductions from Wages)
Are You an Employer with Questions about Employment Law?
If you are uncertain about complying with employment laws or face a dispute or lawsuit brought against you by an employee, our attorneys at Stephen Hans & Associates are glad to discuss your concerns.