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New state law on wage deductions
Companies in New York State will have an easier time recouping overpayments to employees under a state law that takes effect Nov. 6.
The law amends Section 193 of the state labor law, which focuses on wage deductions. Under current regulations, companies can’t use payroll deductions to recoup overpayments or loans to employees, some local lawyers said.
“The Department of Labor had issued an opinion letter on Jan. 21, 2010, which made it clear that employers are prohibited from recovering overpayments or loans to employees through pay deductions,” wrote attorneys Keith J. Gutstein and Angel R. Sevilla of Kaufman Dolowich Voluck & Gonzo in Woodbury, in an alert to clients about the upcoming changes.
By contrast, they wrote, “The new law provides for the use of wage deductions to recapture overpayments of wages due to clerical or mathematical error, or for repayment of advances on wages paid to employees.”
Though the law takes effect in six weeks, it could take years to sort out exactly what it permits and what it doesn’t. For more on what’s in the new law, click here. For more on what some local law firms are saying about the deduction change, click here and here.