Both houses of the New York legislature recently passed Governor Andrew Cuomo’s Program Bill 49, which would amend state labor laws to allow new deductions from employee paychecks.
Existing law allows employers to make payroll deductions only for expressly authorized items such as tax withholdings and benefits, or for commonly recognized deductions taken with the employee’s consent, such as insurance premiums, retirement contributions, and charitable donations. The new law would allow deductions for the following:
- transportation and parking costs
- health club memberships
- tuition and other education expenses, from pre-school to college
- pharmacy purchases made on the premises
- purchases made at events sponsored by a charitable organization affiliated with the employer where at least 20 percent of the profits benefit the charity
- payments for housing provided at or under market rates by non-profit hospitals
- for employees of hospitals, colleges and universities, purchases at campus cafeterias, vending machines and gift shops operated by the employer
- overpayments of wages due to mathematical or clerical errors
- salary advances
Deductions for wage overpayments and salary advances are subject to a number of requirements, including prior written notice of the repayment schedule and an established procedure for disputing repayment terms.
All deductions must be voluntary and authorized in writing by the employee, and the employee must be notified in advance of any substantial changes. Authorization records must be kept on file for the duration of the employee’s term of employment and for 6 years after employment ends.