What payroll deductions are allowed in New York?

Workers in New York are protected by both state and federal wage and hour laws. These statutes establish a minimum wage and require workers to be paid in a timely manner, and they also place strict rules on payroll deductions. Employers are only permitted to make deductions that are required by law or workers have expressly agreed to. Deducting money from paychecks for other reasons violates wage and hour laws and can lead to both civil and criminal sanctions.

Authorized deductions

Most payroll deductions are made to follow with the law or obey a court order. Employers are required to collect payroll taxes and comply with wage garnishment and child support orders. Payroll deductions are also permitted when they benefit the worker and the worker has authorized them in writing. Payroll deductions commonly authorized by workers include:

  • Health insurance
  • Retirement plans
  • Union dues
  • Charitable contributions

Workplace fines

There was a time when it was fairly common for workers to be fined by their employers for tardiness or damaging company property, but workplace financial penalties now violate wage and hour laws. A fine for accepting a bad check, dropping a fragile component or making a costly mistake is an illegal deduction even if it is agreed to in writing because it provides no benefit to the worker. Wage and hour laws also prohibit employers from entering into separate transactions with workers to collect illegal payroll deductions.

Advocating on behalf of workers

If money has been deducted from your paycheck and you think the deduction may be illegal, an attorney with experience in this practice area could advise you to keep your time cards and pay stubs along with any letters, emails or other documents dealing with payroll matters you receive from your employer. This is because the wage and hour laws are clear, and accurate records may be all that are needed to convince employers to settle these matters quickly and discretely. These documents could also be used to support unpaid overtime or wage theft claims.

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