As an employee in New York City, you work hard to earn your paycheck. When your employer takes illegal deductions from your paycheck, you have the right to hold your employer accountable and pursue compensation. Although employers can take wage deductions for taxes and health care premiums, other types of deductions are illegal.
If your employer has made illegal deductions from your paycheck in New York City, you’ll benefit from speaking to an experienced attorney. The employment attorneys at Lipsky Lowe are prepared to carefully review your case and provide you with strategic legal counsel. We will help pursue compensation from your employer for the illegal deductions and additional damages.
Illegal Deductions Under New York State Law
The rules for paycheck deductions in New York are complicated. Generally, deductions made for the employer’s benefit are considered illegal. Receiving inadequate pay can cause serious harm to New York City employees. In some cases, when employers illegally deduct compensation from one employee’s wages, they do it to multiple employees or possibly all of their employees.
Understanding New York state’s laws on illegal deductions can help you protect yourself as a worker. N.Y. Comp. Codes R. & Regs. tit. 12 § 195-4.5 governs paycheck deductions and prohibits the following paycheck deductions:
- Cash shortages
- Breakages
- Fines
- Economic losses to the business
- Charges for check replacement
- Fines or penalties the employer incurred because of the employee’s conduct
- Overcharges for paid family leave premiums
- A deduction not previously agreed on by the employee for substandard work
- Fines for tardiness, excessive leave, misconduct, or quitting without notice
- Any other deduction not made for the employee’s benefit
Illegal Deductions for Losses Related to Business Operations
Employers cannot deduct compensation for ordinary business losses. These types of illegal deductions include breakages. Suppose an employer accidentally knocks dishes off a restaurant’s commercial kitchen countertop. An employer cannot deduct the replacement cost of those dishes from the employee’s paycheck. The same applies when the breakage involves more expensive machinery, technology, or other business equipment. Other forms of expired or damaged products and supplies may fall under this category.
Similarly, employers cannot deduct compensation from an employee’s paycheck for cash shortages from the cash register. The employer may have the right to take other actions against an employee whose cash register is short of cash, such as writing the employee up and deciding on disciplinary action. However, the employer cannot deduct the amount of missing cash from the employee’s paycheck under any circumstances.
When Are Employers Allowed to Make Wage Deductions?
Under New York law, paycheck deductions for recovering overpayments and wage or salary advancements are allowed. Employers are also authorized to take deductions for pre-tax contribution plans approved by the IRS, wage garnishments, and deductions for child support and taxes. When employers make lawful deductions for insurance premiums, retirement benefits, and similar expenses, they must always be authorized by the employee in writing and for the employee’s benefit.
Employers may charge employees only if the employee has given express written consent. This means that an employer cannot declare, “I’m charging you for breaking that item” after the breakage happens and then legally deduct the cost from the employee’s paycheck. Prior authorization must be maintained in the employee’s records. Employers cannot pressure employees to sign prior authorizations by threatening termination of their position if they don’t sign.
Furthermore, if an employer significantly alters the payment deduction agreement, they must inform the employee prior to executing the change. The employer is also obligated to retain the authorization document for the duration of the employee’s employment and for six years following the end of that employment.
How to Recover Compensation for Illegal Deductions in New York
Knowing what steps to take next is essential if your employer has made one or more of the abovementioned illegal deductions. In New York, you have the right to seek compensation from your employer for your lost wages and other damages. You have the right to ask your employer to explain the reason for the deduction. It is also essential to ask your employer to provide proof they informed you about the deductions.
Even if your employer-provided notice of the deduction, you might be entitled to compensation if the reason for the deduction is illegal. Speaking to an attorney is a beneficial next step. Your attorney can help you file a complaint with the New York Department of Labor. While pursuing a complaint, your employer cannot retaliate against you by firing you, cutting your hours, reducing your wages, or making any other adverse employment decision.
Wage and Hour Compliance for Employers in New York City
Wage and hour laws regarding how and when to pay employees are complex. As an employer, staying on top of the recent changes to employment laws can be challenging. Working with an employment attorney can help your business avoid making illegal deductions and violating other employment laws.
At Lipsky Lowe, we provide employers in NYC with guidance and counsel, helping them fully understand the applicable laws and carry out lawful wage deductions. Working with experienced legal counsel can help employers limit their liability and save time and money.
Contact a Wage and Hour Attorney in New York
If your employer has made illegal deductions from your paycheck, speaking to an attorney as soon as possible is crucial. You only have a limited amount of time to file a complaint against your employer for compensation. Don’t hesitate to contact the experienced employment attorneys at Lipsky Lowe. We represent clients in New York City and throughout New York and offer complimentary, no-obligation consultations.