Overview: On December 7, 2018, New York Governor Cuomo signed into law bill A10615 immediately extending for eight years the 2012 amendments to New York Labor Law 193 that permit employers to make deductions from wages for items such as overpayments and advances against wages, subject to certain procedures governed by Labor Department regulations.
Details:
The amendments to New York Labor law were set to expire on November 6, 2018. A10615 states as follows:
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 3 of chapter 451 of the laws of 2012, amending the labor law relating to permitted deductions from wages, as amended by chapter 386 of the laws of 2015, is amended to read as follows:
This act shall take effect on the sixtieth day after it shall have become a law and shall expire and be deemed repealed 8 years after such effective date.
This act shall take effect immediately.
Background:
The state of New York Department of Labor amended the New York Code of Rules and Regulations, specifically 12 NYCRR Part 195, which amended wage deduction regulations. These new rules took effect on October 9, 2013. These regulations are intended to establish provisions governing authorized deductions for the benefit of employees, for recovery of overpayments due to clerical or mathematical errors, and for repayment of advances. The regulations apply to all employers and their employees, where the term “employer” includes any person, corporation, limited liability company, or association employing any individual in any occupation, trade, business or service, and where the term “employee” means any person employed for hire by an employer in any employment. The regulations do not apply to government agencies.
Under these regulations, no employer may make any deductions for wages except those that fall within the following four categories:
(1) Any deductions made in accordance with any law, rule or regulation issued by any governmental agency.
(2) Deductions authorized by and for the benefit of, the employee.
(3) Deductions for the recovery of overpayments.
(4) Deductions for the repayment of wage advances.
The new regulations prohibit any deductions for employee purchases of tools, equipment and attire required for work; recoupment of unauthorized expenses; repayment of employer losses, including for spoilage and breakage, cash shortages, and fines or penalties incurred by the employer through the conduct of the employee; fines or penalties for tardiness, excessive leave, misconduct or quitting without notice.
It is important to note that under the new regulations, employers must follow specific rules in order to collect an overpayment of wages from an employee. A brief description of some of the highlights of the overpayment of wages requirements are found below:
· Timing and duration. The employer may only recover such overpayments as were made in the eight (8) weeks prior to the issuance of the notice [of intent (described below)]. The employer may make deductions to recover overpayments for a period of six (6) years from the original overpayment;
· Frequency. The employer shall recover overpayments by wage deduction no more frequently than once per wage payment, provided that such deduction complies with this Part.
· Limitations on the Periodic Amount of Recovery. An employer may recover overpayments by deducting the amount of the overpayment from the employee’s wages if the deduction complies with the following:
o Where the entire overpayment is less than or equal to the net wages earned after other permissible deductions in the next wage payment, the employer may recover the entire amount of such overpayment in that next wage payment.
o Where the recovery of an overpayment exceeds the net wages after other permissible deductions in the immediately subsequent wage payment, the recovery may not exceed 12.5% of the gross wages earned in that wage payment nor shall such deduction reduce the effective hourly wage below the statutory state minimum hourly wage.
· Notice of Intent. The employer shall provide the employee with notice of the intent to commence the deductions to recover the overpayment. In such cases where the entire amount of the overpayment may be reclaimed in the next wage payment, notice must be given at least three days prior to the deduction. In all other cases, notice shall be given at least three weeks before the deductions may commence. The notice must contain the following:
o Amount overpaid in total and per pay period.
o Total amount to be deducted and the date each deduction will occur followed by the amount of each deduction.
o The notice must also provide notice to the employee that he or she may contest the overpayment, provide the date by which the employee shall contest, and include the procedure by which the employee may contest the overpayment and/or terms of recovery, or provide a reference to where such procedure can be located.
· Procedure. The employer shall implement a procedure by which the employee may dispute the overpayment and terms of recovery, and/or seek a delay in the recovery of such overpayment. Dispute resolution provisions in collective bargaining agreements existing at the time of issuance of these regulations which provide at least as much protection to the employee shall be deemed to be in compliance with this section. Dispute resolution provisions in collective bargaining agreements executed after the issuance of these regulations which provide at least as much protection to the employee and which specifically reference § 195-5.1 will also be deemed to be in compliance.
· The employee may only respond within one week from the date of the receipt of the notice of intent to recover overpayments.
· The employer must reply to the employee’s response within one week of receipt of the employee’s response and address the issues raised by the employee in his or her response. In addition, the employer reply must contain a clear statement indicating the employer’s position with regard to the overpayment, including whether the employer agrees with the employee’s position(s) regarding the overpayment or disagrees with the employee’s position(s) and provide a reason why the employer agrees or disagrees.
· The employer must give the employee written notice of the opportunity to meet with the employer within one week of receiving the employer’s reply to discuss any disagreements that remain regarding the deductions.
· The employer must provide the employee with written notice of the employer’s final determination regarding the deductions within one week of this meeting.
· Should employees appeal utilizing the required procedure, the employer may not commence taking the deduction until at least three weeks after issuing the final determination.
· Where the entire overpayment may be reclaimed in the next wage payment after the overpayment, the employee must provide their response to the employer within the two days of receipt of the notice as outlined in the bullet above titled “Notice of Intent.”
For a copy of A10615 please click on the link provided below:
https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=A10615&term=2017&Summary=Y&Text=Y
For a copy of the regulations that were set to expire on November 6, 2018 and now have been extended for an additional eight years please click on the link provided below:
https://labor.ny.gov/legal/laws/pdf/wage-deduction/12-NYCRR195-Wage-Deductions-Text.pdf
Action Required: As always, please be sure to contact your Human Resources Business Partner if you have any questions.
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