Relates to permitted deductions from wages.
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
PURPOSE: This bill would amend Labor Law § 193 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, subdivision 1 to permit the following: -Wage deductions related to the repayment of advances and loans on wages and wage overpayments; and -new permissible wage deductions, with employee consent, including: -costs associated with discounted mass transit tickets, passes, or user cards; -fitness or health club and/or gym membership dues; -cafeteria, vending machine, and pharmacy purchases made at the employer's place of business, and gift shops run by hospitals, colleges and universities; -tuition, room, board and fees for nursery, primary, secondary and postsecondary education costs; and -daycare, before- and after-school care expenses.
With regard to the use of wage deductions for the purpose of recovering overpayments or for repayment of advances of wages, the bill would require that employers comply with regulations promulgated by the Commissioner of Labor for this purpose, that must include 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 before commencing the 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). It would also renumber Labor Law § 193 subdivision 2 as subdivision 3 and authorize wage deductions permitted or required under a collective bargaining agreement. It would limit deductions for certain items such as payments on purchases made at fundraising events, cafeteria, vending, pharmacy, and covered gift shop purchases, and similar payments by requiring that the aggregate amount of such purchases within a pay period not exceed a maximum amount established by the employer, shall not exceed a maximum limit established by the employee, and not be permitted when they exceed the lower of these two limits. An employer would be obligated to provide an employee with information regarding purchases and a running total of all charges that would be deducted from the employee's wages on the next payday.
With the exception of certain wage deductions, an employee's consent to a wage deduction 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. This section 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 Labor Law § 193 does not limit the protections available under Article 8 of the Labor Law.
Section 3 provides for the effective date.
EXISTING LAW: The Labor Law allows employers to make deductions from employees' wages only when the deductions are otherwise allowed by 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.
STATEMENT IN SUPPORT: The law unduly restricts employees from deducting payments from their paychecks for valuable services provided by the employers. This is disadvantageous to both employers and employees. This bill would change these restrictions and would allow an employer, with the employee's consent, to deduct wages from an employee's paycheck to cover specified goods and services. 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. Further, the bill would ensure that employees are fully informed of the terms associated with all voluntary deductions.
Finally, the inadvertent overpayment of wages due to mathematical or other clerical errors occurs with some frequency. The 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, allowing employees to weather financial setbacks or address unexpected expenses.
LEGISLATIVE HISTORY: This bill, in a slightly different form, was a Department of Labor Departmental bill in 2011 when it passed the Assembly (A.8465).
BUDGET IMPLICATIONS: There are no State fiscal implications.
EFFECTIVE DATE: This bill would take effect 60-days after enactment and will expire and be deemed repealed three years after it shall take effect.
STATE OF NEW YORK ________________________________________________________________________ 7790 IN SENATE June 18, 2012 ___________Introduced by Sen. YOUNG -- (at request of the Governor) -- 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. LBD12164-01-2 S. 7790 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 OR DISCOUNTED PASSES, TOKENS, FARE CARDS, VOUCHERS, OR OTHER ITEMS THAT ENTITLE THE EMPLOYEE TO USE MASS TRANSIT; (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 THE EMPLOYER, WHERE THE EMPLOYER IS A HOSPITAL, COLLEGE, OR UNIVERSITY; (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 SUCH A PROCEDURE AND A REQUIREMENT THAT NOTICE OF THE PROCEDURE FOR DISPUTING 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 SUCH A PROCEDURE AND A REQUIREMENT THAT NOTICE OF THE PROCEDURE FOR DISPUTING THE REPAYMENT OR SEEKING TO DELAY 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,S. 7790 3
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.