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What wage deductions are unlawful in New York?

On Behalf of | Jul 4, 2024 | Employment Law

Conducting wage deductions can be challenging for employers when pay regulations vary per state. These policies could be strict, making companies prone to mistakes. Since the penalties for these wage-related violations could be hefty, employers should thoroughly check what rules apply before making any deductions.

Aside from being aware of the relevant requirements and practices, it can also be helpful to learn what deductions are unlawful. In New York, taking part of someone’s wage for the following items is typically illegal:

  • Losses related to business operations — These deductions can include breakages, cash shortages and fines associated with the company’s regular activities. Other losses, such as expired or damaged supplies and products, may also fall under this category.
  • Payment or check charges — When crediting the wage requires a transaction fee or charge, the employer should cover this cost.
  • Overcharges on benefit premiums — Although deductions for insurance premiums or taxes are legal, an overcharge is not, making the employer responsible for correcting this error.

Other deductions can be unlawful based on whether the worker or employee authorized them. Still, the law has specific regulations for these scenarios, warranting detailed evaluation to determine if there are legal risks.

Complying with wage-related policies

Keeping up with legalities surrounding wage deductions can be difficult, primarily when occupied with the business’s daily operations. In these instances, consider seeking legal guidance and counsel to comply with any labor rules that may apply before deducting items from someone’s pay. By fully understanding the situation and the applicable laws, employers can carry out transactions appropriately, helping them avoid legal issues and address possible disputes later on.


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