New Jersey Deductions From Pay laws & compensation compliance analysis

New Jersey Deductions From Pay: What you need to know

New Jersey employers may withhold a portion of an employee's wages when expressly permitted to do so by federal or New Jersey state law or regulation, e.g., federal and state income tax withholding. In addition, if required by a collective bargaining agreement or authorized in writing by the employee, employers may make deductions for the following (NJ Rev. Stat. Sec. 34:11-33.6; NJ Rev. Stat. Sec. 34:11-4.4; NJ Admin. Code Sec. 12:55-2.1):
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• Employee benefit, health, pension, retirement, or profit-sharing plans
• Payments into company-operated thrift plans pursuant to the employee's written authorization
• Payments into stock option or stock purchase plans to buy stock of the employing corporation at market price or less if authorized in writing by the employee or under a collective bargaining agreement
• Payments to banks for Christmas, vacation, or other savings funds
• Payments into employee personal savings accounts, such as payments to a credit union, savings fund society, savings and loan or building and loan association if authorized by employees
• Payments related to an employee's financial obligation to the state of New Jersey with the employee's written authorization (NJ Admin. Code Sec. 12:55-2.3)
• Charitable contributions to organized and generally recognized charities, provided the deductions for such contributions are approved by the employer
• Union dues and fees, or to payments made to purchase U.S. government bonds
• Mass transit tickets, provided that such method of payment is available to all employees
• Similar purposes authorized by labor commissioner (NJ Admin. Code Sec. 12:55-1.2 and Sec. 12:55-2.2)
If an employee fails to make scheduled payments to the Higher ...

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