New York Loans laws & HR compliance analysis

New York Loans: What you need to know

Deduction for repayment of salary or wage advances. Effective November 6, 2012, employers may make deductions with the written authorization of the employee that are related to the repayment of advances of salary or wages made by the employer to the employee. Deductions to cover such repayments must also be made in accordance with regulations that will be issued.
Previously, New York law restricted deductions from an employee's pay to those required by a law or a rule or regulation of a governmental agency, and deductions expressly authorized in writing by the employee and for the benefit of the employee were allowed. The authorization had to be kept on file on the employer's premises (NY Labor Law Sec. 193). Specifically permitted deductions included “payments for insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, payments for United States bonds, and payments for dues or assessments to a labor organization.” There was no limit on the amount that might be deducted for these listed purposes.
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The law also permitted employee-authorized deductions for “similar payments for the benefit of the employee.” The New York Department of Labor (NYDOL) had taken the position that deductions for overpayments from an employee’s wages were not permitted, even with the employee’s written consent, because they were not similar to the types of enumerated payments for which deductions from wages are authorized and, therefore, might not be deducted from an employee’s wages. The NYDOL also applied this same logic to deductions for salary/benefit advances to employees, saying that deductions for salary/benefit advances from an employee’s wages were ...

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