New York State now allows employers to make payroll deductions for inadvertent overpayment of wages

By Barbara J Harris

Section 193 of the New York Labor Law proscribes an employer’s right to make deductions from its employees’ paychecks with very limited exceptions. In November 2012, the law was amended to allow employers to make payroll deductions for the inadvertent overpayment of wages, provided the deductions were made in compliance with regulations to be promulgated by the Labor Commissioner.

Earlier this month, the Labor Commissioner promulgated the long-awaited final regulations (12 NYCRR Part 195-5.1, effective as of 9 October 2013). Consequently, employers may now legally make payroll deductions for the recovery of wage overpayments made due to a mathematical or other clerical error by the employer, as long as the deduction complies with the following procedures.

The employer must provide written notice to the employee of the intent to recover the overpayment, stating the amount overpaid, the date(s) of the overpayment, the total amount to be deducted, the date(s) each deduction will be made and the deadline and procedure for contesting the overpayment (or reference to where the procedure can be found)…

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