S5786-2011 Actions

• Jun 18, 2012: PRINT NUMBER 5786A
• Jun 18, 2012: AMEND AND RECOMMIT TO LABOR
• Jan 4, 2012: REFERRED TO LABOR
• Jun 24, 2011: RECOMMITTED TO RULES
• Jun 17, 2011: ORDERED TO THIRD READING CAL.1364
• Jun 16, 2011: REFERRED TO RULES

S5786-2011 Meetings

S5786-2011 Calendars

S5786-2011 Memo

BILL NUMBER:S5786

TITLE OF BILL:

An act
to amend the labor law, in relation to permitted deductions from wages;
and providing for the repeal of such provisions upon expiration thereof

This bill would amend several provisions of the Labor Law to: (1)
establish additional categories of permissible wage deductions that
may be taken by employers with the consent of employees; (2) provide
for 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; and (3) enact other provisions with regard to
deductions.

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend Labor Law � 193(1) as follows:

Paragraph a is amended to exempt from its provisions deductions
related to the repayment of advances and loans on wages and wage
overpayments.

Paragraph b is amended to add new permissible wage deductions, with
employee consent, including:

o costs associated with discounted mass transit tickets, passes, or
user cards;
o fitness or health club and/or gym membership dues;
o cafeteria, vending machine, and pharmacy purchases made at the
employer's place of business, and gift shops run by hospitals,
colleges and universities;
o tuition, room, board and fees for nursery, primary, secondary and
post-secondary education costs;
o day care, before- and after-school care expenses;

Paragraph c is added to address deductions associated with the
recovery of overpayment of wages where overpayment is due to a
mathematical or other clerical error by the employer.

Paragraph d is added to address deductions associated with repayment
of advances on wages or salary. With regard to the use of wage
deductions for the purpose of recovering overpayments or for repayment
of advances of wages, the bill requires that in making such
recoveries or repayment, employers comply with regulations
promulgated by the Commissioner for this purpose, which regulations
must include, but not be limited to,
provisions governing: the types of payments that will be covered by
this section: the timing, frequency, duration and method of recovery
or repayment: limitations on the periodic amount of such recovery or
repayment; and notice to employees prior to commencement of recovery
or repayment, including notice of procedures for disputing any
overpayments or delaying the start of recovery or repayment.


Section 2 of the bill would add a new subdivision 2 to Labor Law � 193
to clarify that deductions made in conjunction with employer
sponsored pre-tax contributions are permissible under Labor Law � 193
(1)(a).

Section 3 of the bill would renumber subdivision 2 of Labor Law � 193
as subdivision 3 and amends that subdivision to authorize wage
deductions permitted or required under any provision of a current
collective bargaining agreement. The subdivision is also amended to
include limitations on deductions for certain items:
payments on purchases made at fundraising events, cafeteria, vending,
pharmacy, and covered gift shop purchases, and similar payments. Such
limitations require that the aggregate amount of such purchases
within a pay period shall not exceed a maximum amount established by
the employer, shall not exceed a maximum limit established by the
employee, and shall not be permitted when they exceed the lower of
these two limits.
Finally, the employer is obligated to provide the employee with
information regarding purchases and a running total of all charges
that will be deducted from the employee's wages on the next payday.

The bill also provides that, with the exception of wage deductions
required by a collective bargaining agreement, an employee's consent
to wage deductions may be revoked in writing at any time. Upon
receipt of an employee's revocation, the employer must cease the wage
deduction as soon as practicable, and, in no event, more than four
pay periods or eight weeks after the consent has been withdrawn,
whichever is sooner.

Section 4 of the bill would renumber subdivision 3 of Section 193 of
the Labor Law as subdivision 4 and would amend that subdivision to
clarify that nothing in modified Section 193 shall be read to limit
the protections available under Article 8 of the Labor Law.

Section 193 of the Labor Law bars all wage deductions except those
that are made in accordance with the provisions of any law or any
rule or regulation issued by any governmental agency or are expressly
authorized in writing by an employee, for the benefit of the
employee. The section requires that an employer keep such
authorization on file on the employer's premises. Authorized
deductions are limited to payments for insurance premiums, pension or
health and welfare benefits, contributions to charitable
organizations, payments for United States bonds, payments for dues or
assessments to a labor organization, and similar payments for the
benefit of the employee. The section also precludes an employer from
deducting from wages or requiring an employee to pay by separate
transaction unless a charge or payment is a permitted wage deduction.

LEGISLATIVE HISTORY:

This is a new bill.

STATEMENT IN SUPPORT:

The Labor Law currently allows employers to make deductions from
employees' wages under two specifically referenced circumstances:
when the deductions are either allowed under law (e.g., tax


withholdings) or when they fall within specific categories of
commonly recognized deductions for which employee consent has been
given (e.g., insurance premiums, retirement contributions, charitable
contributions).
Wage deductions are not permitted for the purchase of goods and
services provided by employers for the convenience of the employee on
items such as gym memberships, purchases at cafeterias, vending
machines, and employer operated pharmacies. This is disadvantageous
to both employers and employees.

This bill would change these restrictions and would allow employers,
with the employees consent, to deduct wages from an employee's
paycheck to cover specified goods and services - including, payments
for swipe card systems for an employee's convenience to cover items
such as purchases at cafeterias, vending machines, and pharmacies.
The bill would also allow employers to make arrangements with service
providers, including, health clubs, day care centers, and parking
vendors for the benefit of employees who wish to utilize such
services and pay through a wage deduction system.

Allowing for the use of wage deductions for service payments is not
only convenient, but provides the employee with an opportunity to
make periodic payments without the interest charges that would
accumulate if credit cards or loans were used for the same purpose.
At the same time, protections contained in the bill would ensure that
employees are fully informed of the terms associated with all
voluntary deductions, that such deductions are truly voluntary, that
authorization for a deduction may be withdrawn at any time, and that
employees may set limits on their wage deduction spending amounts.

Finally, despite diligent efforts made by employers, payroll agents,
and others, inadvertent overpayment of wages due to mathematical or
other clerical error occurs with some frequency. The proposed bill
would allow recapture of overpayments pursuant regulations to be
promulgated by the Commissioner. Similarly, the bill would provide a
regulatory framework in which employers may give employees advances
on wages, a benefit provided to employees to allow them to weather
financial setbacks or address unexpected expenses. Under both
circumstances, the regulations will take into account factors such as
the size of payments that may be deducted; the timing, frequency,
duration, and method of such deductions; and requirements for notice
to the employee and the opportunity for disputing or delaying
deductions that will be taken.

BUDGET IMPLICATIONS:

This bill would have no fiscal implications.

EFFECTIVE DATE:

This bill would take effect 60-days after enactment and shall expire
and be deemed repealed three years after it shall take effect.

S5786-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         5786
 2011-2012 Regular Sessions
 I N  SENATE
 June 16, 2011
 
 Introduced  by  Sen. YOUNG -- (at request of the Department of Labor) -
 read twice and ordered printed, and when printed to  be  committed  to
 the Committee on Rules
 AN  ACT to amend the labor law, in relation to permitted deductions from
 wages; and providing for the repeal of such provisions upon expiration
 thereof
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section  1. Subdivision 1 of section 193 of the labor law, as added by
 chapter 548 of the laws of 1966, is amended to read as follows:

 1. No employer shall make any deduction from the wages of an employee,
 except deductions which:

 a. are made in accordance with the provisions of any law or  any  rule
 or  regulation  issued  by any governmental agency INCLUDING REGULATIONS
 PROMULGATED UNDER PARAGRAPH C AND PARAGRAPH D OF THIS SUBDIVISION; or
 b. are expressly authorized in writing by the employee and are for the
 benefit of the employee[;], provided that such authorization  is  VOLUN
 TARY  AND ONLY GIVEN FOLLOWING RECEIPT BY THE EMPLOYEE OF WRITTEN NOTICE
 OF ALL TERMS AND CONDITIONS OF THE PAYMENT AND/OR ITS BENEFITS  AND  THE
 DETAILS  OF THE MANNER IN WHICH DEDUCTIONS WILL BE MADE.  WHENEVER THERE
 IS A SUBSTANTIAL CHANGE IN THE  TERMS  OR  CONDITIONS  OF  THE  PAYMENT,
 INCLUDING BUT NOT LIMITED TO, ANY CHANGE IN THE AMOUNT OF THE DEDUCTION,
 OR  A SUBSTANTIAL CHANGE IN THE BENEFITS OF THE DEDUCTION OR THE DETAILS
 IN THE MANNER IN WHICH DEDUCTIONS SHALL BE MADE, THE EMPLOYER SHALL,  AS
 SOON  AS PRACTICABLE, BUT IN EACH CASE BEFORE ANY INCREASED DEDUCTION IS
 MADE ON THE EMPLOYEE'S BEHALF, NOTIFY THE EMPLOYEE PRIOR TO  THE  IMPLE
 MENTATION  OF  THE CHANGE.   SUCH AUTHORIZATION SHALL BE kept on file on
 the employer's premises FOR THE PERIOD  DURING  WHICH  THE  EMPLOYEE  IS
 EMPLOYED  BY  THE EMPLOYER AND FOR SIX YEARS AFTER SUCH EMPLOYMENT ENDS.
 NOTWITHSTANDING THE FOREGOING,  EMPLOYEE  AUTHORIZATION  FOR  DEDUCTIONS
 UNDER  THIS SECTION MAY ALSO BE PROVIDED TO THE EMPLOYER PURSUANT TO THE
 TERMS OF A COLLECTIVE BARGAINING AGREEMENT. Such  authorized  deductions
 shall be limited to payments for:

 (I) insurance premiums[,] AND PREPAID LEGAL PLANS;
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD13171-01-1
 
       S. 5786                             2
 (II) pension or health and welfare benefits[,];
 (III) contributions to A BONA FIDE charitable [organizations, payments
 for] ORGANIZATION;
 (IV)  PURCHASES  MADE  AT  EVENTS  SPONSORED BY A BONA FIDE CHARITABLE
 ORGANIZATION AFFILIATED WITH THE EMPLOYER WHERE AT LEAST TWENTY  PERCENT
 OF  THE  PROFITS  FROM  SUCH  EVENT ARE BEING CONTRIBUTED TO A BONA FIDE
 CHARITABLE ORGANIZATION;
 (V) United States bonds[, payments for];
 (VI) dues or assessments to a labor organization[,];
 (VII) DISCOUNTED PARKING MADE AVAILABLE TO EMPLOYEES ON  PREMISES  NOT
 OWNED  OR  OPERATED  BY  THE EMPLOYER OR DISCOUNTED PASSES, TOKENS, FARE
 CARDS, VOUCHERS, OR OTHER ITEMS THAT ENTITLE THE EMPLOYEE  TO  USE  MASS
 TRANSIT,  PROVIDED, HOWEVER, THAT NOTWITHSTANDING THE FOREGOING, EMPLOY
 ERS MAY DEDUCT FROM EMPLOYEE WAGES CHARGES ASSOCIATED  WITH  PARKING  ON
 THE  EMPLOYER'S  PREMISES  PROVIDED THAT SUCH EMPLOYER HAD BEEN CHARGING
 EMPLOYEES FOR PARKING ON OR BEFORE THE FIFTEENTH DAY OF MAY,  TWO  THOU
 SAND ELEVEN;
 (VIII) FITNESS CENTER, HEALTH CLUB, AND/OR GYM MEMBERSHIP DUES;
 (IX)  CAFETERIA  AND  VENDING MACHINE PURCHASES MADE AT THE EMPLOYER'S
 PLACE OF BUSINESS AND PURCHASES MADE AT GIFT SHOPS  OPERATED  BY  HOSPI
 TALS, COLLEGES, OR UNIVERSITIES;
 (X) PHARMACY PURCHASES MADE AT THE EMPLOYER'S PLACE OF BUSINESS;
 (XI)  TUITION, ROOM, BOARD, AND FEES FOR PRE-SCHOOL, NURSERY, PRIMARY,
 SECONDARY, AND/OR POST-SECONDARY EDUCATIONAL INSTITUTIONS;
 (XII) DAY CARE, BEFORE-SCHOOL AND AFTER-SCHOOL CARE EXPENSES;
 (XIII) PAYMENTS FOR HOUSING PROVIDED AT NO MORE THAN MARKET  RATES  BY
 NON-PROFIT HOSPITALS OR AFFILIATES THEREOF; AND
 (XIV) similar payments for the benefit of the employee.
 C. ARE RELATED TO RECOVERY OF AN OVERPAYMENT OF WAGES WHERE SUCH OVER
 PAYMENT  IS DUE TO A MATHEMATICAL OR OTHER CLERICAL ERROR BY THE EMPLOY
 ER. IN MAKING SUCH RECOVERIES, THE  EMPLOYER  SHALL  COMPLY  WITH  REGU
 LATIONS   PROMULGATED  BY  THE  COMMISSIONER  FOR  THIS  PURPOSE,  WHICH
 REGULATIONS SHALL INCLUDE, BUT NOT BE LIMITED TO, PROVISIONS  GOVERNING:

 THE  SIZE  OF  OVERPAYMENTS  THAT  MAY  BE  COVERED BY THIS SECTION; THE
 TIMING, FREQUENCY, DURATION, AND METHOD OF SUCH RECOVERY; LIMITATIONS ON
 THE PERIODIC AMOUNT OF SUCH  RECOVERY;  A  REQUIREMENT  THAT  NOTICE  BE
 PROVIDED  TO  THE EMPLOYEE PRIOR TO THE COMMENCEMENT OF SUCH RECOVERY; A
 REQUIREMENT THAT THE EMPLOYER IMPLEMENT A PROCEDURE  FOR  DISPUTING  THE
 AMOUNT  OF  SUCH  OVERPAYMENT  OR  SEEKING TO DELAY COMMENCEMENT OF SUCH
 RECOVERY, THE TERMS AND CONTENT OF WHICH  SHALL  BE  ACCEPTABLE  TO  THE
 COMMISSIONER; AND A REQUIREMENT THAT NOTICE OF THE PROCEDURE FOR DISPUT
 ING THE OVERPAYMENT OR SEEKING TO DELAY COMMENCEMENT OF SUCH RECOVERY BE
 PROVIDED TO THE EMPLOYEE PRIOR TO THE COMMENCEMENT OF SUCH RECOVERY.
 D.  REPAYMENT  OF  ADVANCES OF SALARY OR WAGES MADE BY THE EMPLOYER TO
 THE EMPLOYEE. DEDUCTIONS TO COVER  SUCH  REPAYMENTS  SHALL  BE  MADE  IN
 ACCORDANCE  WITH  REGULATIONS  PROMULGATED  BY THE COMMISSIONER FOR THIS
 PURPOSE, WHICH  REGULATIONS  SHALL  INCLUDE,  BUT  NOT  BE  LIMITED  TO,
 PROVISIONS  GOVERNING:  THE  TIMING,  FREQUENCY, DURATION, AND METHOD OF
 SUCH REPAYMENT; LIMITATIONS ON THE PERIODIC AMOUNT OF SUCH REPAYMENT;  A
 REQUIREMENT  THAT  NOTICE  BE  PROVIDED  TO  THE  EMPLOYEE  PRIOR TO THE
 COMMENCEMENT OF SUCH REPAYMENT; A REQUIREMENT THAT THE  EMPLOYER  IMPLE
 MENT  A  PROCEDURE FOR DISPUTING THE AMOUNT OF SUCH REPAYMENT OR SEEKING
 TO DELAY COMMENCEMENT OF SUCH REPAYMENT, THE TERMS AND CONTENT OF  WHICH
 SHALL  BE  ACCEPTABLE TO THE COMMISSIONER; AND A REQUIREMENT THAT NOTICE
 OF THE PROCEDURE  FOR  DISPUTING  THE  REPAYMENT  OR  SEEKING  TO  DELAY
 
       S. 5786                             3
 COMMENCEMENT  OF  SUCH REPAYMENT BE PROVIDED TO THE EMPLOYEE AT THE TIME
 THE LOAN IS MADE.
 

S 2. Subdivisions 2 and 3 of section 193 of the labor law, subdivision
 2 as added and subdivision 3 as renumbered by chapter 160 of the laws of
 1974  and subdivision 3 as added by chapter 548 of the laws of 1966, are
 amended to read as follows:

 2. DEDUCTIONS MADE IN CONJUNCTION WITH AN EMPLOYER  SPONSORED  PRE-TAX
 CONTRIBUTION  PLAN  APPROVED BY THE IRS OR OTHER LOCAL TAXING AUTHORITY,
 INCLUDING THOSE FALLING WITHIN ONE OR MORE OF THE CATEGORIES  SET  FORTH
 IN  PARAGRAPH  B OF SUBDIVISION ONE OF THIS SECTION, SHALL BE CONSIDERED
 TO HAVE BEEN MADE IN ACCORDANCE WITH PARAGRAPH A OF SUBDIVISION  ONE  OF
 THIS SECTION.
 3.  A.  No employer shall make any charge against wages, or require an
 employee to make any payment by separate transaction unless such  charge
 or  payment  is permitted as a deduction from wages under the provisions
 of subdivision one of this section OR IS PERMITTED OR REQUIRED UNDER ANY
 PROVISION OF A CURRENT COLLECTIVE BARGAINING AGREEMENT.
 B. NOTWITHSTANDING THE EXISTENCE OF  EMPLOYEE  AUTHORIZATION  TO  MAKE
 DEDUCTIONS IN ACCORDANCE WITH SUBPARAGRAPHS (IV), (IX), AND (X) OF PARA
 GRAPH  B OF SUBDIVISION ONE OF THIS SECTION AND DEDUCTIONS DETERMINED BY
 THE COMMISSIONER TO BE SIMILAR TO SUCH  DEDUCTIONS  IN  ACCORDANCE  WITH
 SUBPARAGRAPH  (XIV)  OF  PARAGRAPH B OF SUBDIVISION ONE OF THIS SECTION,
 THE TOTAL AGGREGATE AMOUNT OF SUCH DEDUCTIONS FOR EACH PAY PERIOD  SHALL
 BE SUBJECT TO THE FOLLOWING LIMITATIONS: (I) SUCH AGGREGATE AMOUNT SHALL
 NOT  EXCEED  A  MAXIMUM  AGGREGATE LIMIT ESTABLISHED BY THE EMPLOYER FOR
 EACH PAY PERIOD; (II) SUCH AGGREGATE AMOUNT SHALL NOT EXCEED  A  MAXIMUM
 AGGREGATE  LIMIT ESTABLISHED BY THE EMPLOYEE, WHICH LIMIT MAY BE FOR ANY
 AMOUNT (IN TEN DOLLAR INCREMENTS) UP TO THE MAXIMUM  AMOUNT  ESTABLISHED
 BY  THE  EMPLOYER  UNDER  SUBPARAGRAPH  (I) OF THIS PARAGRAPH; (III) THE
 EMPLOYER SHALL NOT PERMIT  ANY  PURCHASES  WITHIN  THESE  CATEGORIES  OF
 DEDUCTION BY THE EMPLOYEE THAT EXCEED THE AGGREGATE LIMIT ESTABLISHED BY
 THE EMPLOYEE OR, IF NO LIMIT HAS BEEN SET BY THE EMPLOYEE, THE LIMIT SET
 BY  THE  EMPLOYER;  (IV) THE EMPLOYEE SHALL HAVE ACCESS WITHIN THE WORK
 PLACE TO CURRENT ACCOUNT INFORMATION DETAILING  INDIVIDUAL  EXPENDITURES
 WITHIN  THESE  CATEGORIES OF DEDUCTION AND A RUNNING TOTAL OF THE AMOUNT
 THAT WILL BE DEDUCTED FROM THE EMPLOYEE'S PAY DURING THE NEXT APPLICABLE
 PAY PERIOD.  INFORMATION SHALL BE AVAILABLE IN PRINTED FORM  OR  CAPABLE
 OF  BEING  PRINTED  SHOULD  THE  EMPLOYEE  WISH  TO OBTAIN A LISTING. NO
 EMPLOYEE MAY BE CHARGED ANY FEE, DIRECTLY OR INDIRECTLY, FOR ACCESS  TO,
 OR PRINTING OF, SUCH ACCOUNT INFORMATION.
 C.  WITH  THE EXCEPTION OF WAGE DEDUCTIONS REQUIRED OR AUTHORIZED IN A
 CURRENT EXISTING COLLECTIVE BARGAINING AGREEMENT, AN EMPLOYEE'S AUTHORI
 ZATION FOR ANY AND ALL WAGE DEDUCTIONS MAY BE REVOKED IN WRITING AT  ANY
 TIME.  THE EMPLOYER MUST CEASE THE WAGE DEDUCTION FOR WHICH THE EMPLOYEE
 HAS REVOKED AUTHORIZATION AS SOON AS PRACTICABLE, AND, IN NO EVENT  MORE
 THAN  FOUR  PAY  PERIODS OR EIGHT WEEKS AFTER THE AUTHORIZATION HAS BEEN
 WITHDRAWN, WHICHEVER IS SOONER.
 [3.] 4. Nothing in this section shall justify noncompliance with arti
 cle three-A of the personal property law relating to assignment of earn
 ings, [nor] WITH SECTION TWO HUNDRED TWENTY-ONE OF THIS CHAPTER RELATING
 TO COMPANY STORES OR with any other law applicable  to  deductions  from
 wages.
 

S  3.  This  act  shall take effect on the sixtieth day after it shall
 have become a law and shall expire and be deemed repealed 3 years  after
 such effective date.

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