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Unlawful Deductions From Paychecks

Attorneys Representing New York Employees in Wage Disputes

Generally, people understand that certain deductions will be taken from their paychecks. While deductions for things like taxes, Social Security, and retirement funds are appropriate, some employers attempt to take advantage of their employees by improperly taking money out of their paychecks. Unlawful deductions from paychecks can cause significant financial losses, and employees who were unjustly denied the pay that they were owed should seek legal counsel regarding their rights. At Gerstman Schwartz, our New York wage and hour lawyers take pride in helping employees fight to protect their rights. If your employer made inappropriate deductions from your paycheck, we can aid you in pursuing the full amount of damages recoverable under the law.

Laws Regarding Deductions From Paychecks

The New York Division of Labor Standards expressly defines which deductions employers are permitted to take from their employees’ paychecks. Specifically, they state that employers can only make deductions from wages that fall into one of four categories. Deductions may be pursuant to a rule, regulation, or law issued by a governmental agency. Deductions can also be taken for the recovery of overpayments and for the repayment of wage advances.

Deductions for overpayments are only permissible when they are due to a clerical or mathematical error by the employer. Furthermore, employers must provide employees with written notice of the intent to take deductions for overpayments, and they can only recover overpayments made in the eight weeks before the notice was issued. Deductions for overpayments are limited to one per wage payment. Similarly, employers must comply with certain rules regarding deductions for wage advances. Prior to obtaining wage advances, employees must agree to the amount of the advance and the timing and duration of the deduction for repayment, including the total amount that must be repaid and the deduction per paycheck.

The final category of permissible deductions, which are those specified by the New York Labor Law (NYLL) or similar to those set forth under the NYLL that are authorized by and benefit employees, is more expansive. Deductions permitted by the NYLL must be authorized in writing by the employee after the employee has been provided with written notice of the conditions and terms of the deduction and details regarding how the deduction will be made. If there is a substantial change in the deduction, a New York employer must notify the employee of the change as soon as possible.

The NYLL currently lists 14 permissible deductions, including insurance premiums, pensions, health and welfare benefits, dues for labor organizations, and gym or fitness membership dues. It also includes donations to charitable organizations, tuition, daycare and before and after school expenses, and transportation, food, and lodging benefits. Notably, the NYLL broadly permits deductions for payments for the benefit of the employee as well.

Examples of Unlawful Deductions From Paychecks

Deductions that do not fall under one of the specified categories are unlawful. For example, deductions for broken equipment, shortage of inventory, and required tools are not permissible. Additionally, an employer must obtain an employee’s written authorization prior to taking a deduction, and a failure to do so may render an otherwise permitted deduction illegal. Even if an employee authorized a deduction, it may be unlawful if it exceeds the amount agreed. In other words, an employer must comply with the statutory requirements before modifying a deduction.

Meet With a Trusted New York Attorney

When employers take unlawful deductions from paychecks, they are essentially committing theft, and they should be held fully accountable. If your employer unlawfully deducted funds from your pay, you could be owed damages, and it is in your best interest to speak to a lawyer as soon as possible. The trusted wage and hour attorneys at Gerstman Schwartz are adept at proving that employers that engage in unjust wage practices should be held accountable, and if we represent you, we will work tirelessly on your behalf. We regularly represent people in wage and hour claims in New York City and in Nassau and Suffolk Counties. You can reach us to set up a meeting through our online form or by calling our New York City office at (212) 227-7070 or our Garden City office at (516) 880-8170.

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