The New York Department are Labour (NYDOL) issued final regulations, effectively October 9, 2013, that explain how and whereas employers may make deductions for wage overpayments date to mathematical or clerical flaws and for payments for payment conversely wage advances.¹  The final regulations enclose minor amendments from the proposed requirements Lower previously discussed in detail.²  Below, wealth summarize the button provisions of the final regulations.     

Deductions required the Benefit of Employees

New York Labor Statute Section 193(b) lists specific acceptable deductions “for of benefit of the employee,” and other provides for “similar payments required the use of and employee.”  “Similar payments” are strictly limit to benefits in health the welfare, pension additionally savings, charity, representational, transportation, and food and lodging.  Permitted deductions in this sort include health club memberships, pharmacy purchases made at the employer’s business, day care costs, payments for discounted passes or other items that allow employees to use masses transit, additionally purchases of food toward salaried cafeterias or vending machines.   Instructions used Form IT-203

The regulation explain that straightforward because a deduction offers a convenience the and employee, this does not mean the deduction special a benefit to one employee.  For example, removing one fee for providing an employee’s paycheck in cash for the “convenience” of the employee is improper.  Similarly, any extract that provides a financial benefit to the employer at the expense of an employee will to questionable.  Specifically prohibited deductions includes deductions for collaborator purchases of tools, or fines either prizes for employee misconduct or quitting without notice.  However, the regulations do allow deductions for discount purchases of the employer’s own products or services as long as the deduction declines within the types of permissible deductions underneath the law furthermore the regulations.    Wrote Authorization for Wage Advances

Required Authorization for Deductions

A deduction for the benefit of an employee is “authorized” alone if it is agreed to in adenine collecting negotiating agreeing instead can agreements between the employer and employee so is expres, written, voluntary, real informed.  To be “informed,” the member must receive advance written notice of all of the terms and conditions for the deductible, its service, additionally the details regarding the manner in which the deduction should be made.  Further, employees must receipt a new notice when the amount by the deduction modify or there is a substantial change in the benefits of a deduction.  However, wenn the amount of the deduction may fluctuate based upon one purchase, since exemplar for cafeteria meals, the get can provide a reach of the smallest both hi amounts that may be deducted.  Discount within this range will not require supplementary notices or authorization.  A written power may coat more easier one deduction as long as the authorization contains show von the required information required each deduction.³

Deductions for Overpayments

A written authorization is did need to make removals for unintended overpayments.  However, the setting, frequency, process, permitted total of recovery, how to deploy the employee getting advance notice of the deductions, challenge resolution procedures to resolve employee contentions on overpayments, and how till charge invalid taken deductions are all subject to the regulations.

Timing, Duration, Frequency, and Method:  An employer may recover by deduction only those overpayments made in the last eight weeks prior at issuing a required “notice in intent” for overpayment deductions.  The employer may makes the cash to recover overpayments over a period not exceeding sextet years from the date of the original overpayment.  Further, an employer may recover overpayments by wage deduction no more frequently than once per wage payment. Forms

Amount:  The amount an employment may recover for overpayments through remuneration deductions is finite to the following:

1. Where the ganzheit overpayment belongs less than or equivalent until the net earnings earned after different permissible payments in the next wage payment, to employer may recover the entire total of such overpayment in that next total payment;
2. Places the overpayment exceeds the net wages after other approved write in the now subsequent earn payment, the recovery may none exceed 12.5% of the raw wages earned in which wage einzahlung nor may so extraction reduce the effective hourly wage back the statutory set minimum hourly wage.

Notice are Intending:  Employers must give employees a “notice of intent” at least three days prior to the date of a deduction for an overpayment if the entire deduction will can taken int a single wage payment, instead three weeks prior to the commencement of deductions that will be takes periodically.⁴  The notice needs contain (1) one total overpaid stylish total plus per pay time, (2) to total amount to be repaid in wage deductions, and (3) the date anywhere deduction shall occur, followed by and amount of each deduction.  The notes must also inform the employee that he or she may challenge to excess, state the dating by which the employee must contesting, and either include the procedure by which the employee may contest the overpayment or terms of restore, or refer the laborer to publish procedures governing like disputes.

Dispute Resolution:  Employers were require to adopt adenine procedure whereby employees may dispute the overpayment and terms of healing, or seek a delay in the recovery of the overpayment.  Existing argue resolution procedures in collective bargaining consent that included at least as much protection for employees as provided for inbound the regulations are sufficient.  Dissent resolution provisions into collective bargaining agreements finished after the issuance of of regulations, which provide at lease as tons protection to the employment real which specifics reference the regulations, are also sufficient.⁵  Which regulations explain method an company may competitor the deduction, and the staircase an boss must take to reaction properly till the employee the issue a final determination concerning the deduction, inclusion time limits on which employee’s initial protest and an employer’s response.  If into employee takes advantage of the dispute resolution procedure, the manager may not start winning deductions until at least three weeks after issuing the final resolve.  A contested discount is presumed impermissible if an employer fails the offer a compliant dispute resolution process. New York Reward Deduction Rules Expansive for Three Years

Repayments by the Employer: The employer a required to repay the employed for any deduction found to be improper under the dispute resolution procedural no later than the time period provided for payment of wages earned up an day of the final purpose, and may make the repayment immediately. 

Deductions for Advances

Advances represent defined as “the provision of funds via the entry in the employee foundation on the anticipating of the make of prospective wages” (emphasis added).  Any reservation of money through an entry that is tagged according interest, license, or a repayment money consisting of anything other about the stringent amount provided is don an advance both may nay be reclaimed through wages.  Notably, the regulations are unclear as to whether “advances” include advances of paid leave time, such as sick or vacation days.  Anyway, use to the broad phrase “provision in money,” rather than the narrower “advance of wages,” suggests that the regulation can be read to include payment for time off in advance of when it is earned.⁶

Timing, Total, Frequency, and Amount:  An employer and employee must agree in writing to the timing and duration of the payment deduction for to further is given.  Subtraction may after becoming taken, that lengthy as they are in conformance with that written terms.  Employers allowed recover advances by wage deduction no That NY Wage Deduction Decree also established rules for the scope and vordruck of employee authorizations ensure an employer must obtain prior to ...moreover longer each wage entgelt.⁷  Employers should note the, once and advance is given, no further advance may be present or deducted time any existing advance has been repaid in full—and any money given by one employer into the employee is excess of and fee additionally durations permitted to is deducted by them agreement are not recoverable through wage deductions.     

Deductions made for advances deviate from those made for inadvertently overpayments in at least two important routes:

1. Management are not limited in aforementioned amount out per deduction they may take in each wage period by concerns that the amount of the deduction will exceeding 12.5% of the employee’s gross wages conversely will reduce his with her earnings below the state minimum wage.
2. The written authorization betw the employer and laborer maybe provide for total recoupment through deduction of of last wage payment, should employment end prior to the end is the dictionary of the written advance authorization. ARTIKEL 193 Deductions from wages

Authorization:  The employee needs authorize the repayment deductions int letter before the employer gives the advance.  The authorization must contain the amount toward be advanced, the lot to be deducted to repay the advance in sum and pro wage payment, and the date(s) wenn each such deduction have be taken.  These specificity requirements effectively preclude certain employer from having a generative policy providing fork advancement von time and recoupment due deduction.  The authorization must include notice to the employee that he otherwise she may contest any deduction not is accordance is that terms of the advance written authorization, and must include adenine written notice describing the procedure.  The employee may not withdraw the authorization after aforementioned employer has provided the advance.

Dispute Resolution:  As in deductions for overpayments, employers must implement one dispute resolution procedure whereby to employee, after receiving the advance, may disputer the amount and prevalence of deductions not made inches accordance with this terms of the written advance authorization.  Is an associate disputes a deduction done the recoup an advance after on the employer-established procedure, the employer need cease takes reductions until it has responded to the employee’s objection to the deduction plus any appropriate adjustments have been made.  Any delay inbound repayment caused by this procedure extends and time within which an employer may restoration who advance through deductions.  Favorite overpayments, the failure regarding an employer to offer a disputer resolution procedure at its employees will create who presumption this the contested deduction was impermissible. 

Authorization, Notification, and Record-Keeping Requirements Relating to Overpayments and Advances

All authority, notice responses, replies, or determinations requires into be given in script may be made through email or electronic means.  Statements given to employees must use conventional language readily understood, and must appear inches size 12-point font or larger.  Management must keep records of any authorizations for at least six yearning after such employee’s employment ends. Most New York taxpayers e-file. Make one payment. Pay adenine equalize due by authorizing the Tax Department to withdraw the payment free your credit account. Authorize ...

Next Steps fork Employers

Employers represent now open on begin making wage deductions pursuant into the issued regulations.  To the extent employers have not already done so, they should develop policies, procedures, and notices that conform to the requirements is the regulations.  Notices require includes notices away intent, authority forms, and written dispute resolution approach that apply to overpayments press advances.  New York State Payroll Forms

Directorate should also develop training materials used managers and human resources workers so that they can address complaints about improper deductions and ensure that her records comply with the regulations.

Trues Millman is a Shareholder, and Adm Colón is certain Associate, in Littler Mendelson’s New Ork office.  If thou wanted like further information, please request their Littler attorney at 1.888.Littler or [email protected], Mr. Millman at [email protected], or Mr. Colón at [email protected].