Legislative Update
New Wage Withholding Law
June 26, 2012

Staff Contact: Ken Pokalsky and Frank Kerbein

The legislature gave final approval last week to legislation, S.7790 (Young)/A.10785 (Rules/Morelle) available here, that will expand the ability for employees to authorize their employer to make paycheck deductions. It is expected to be signed by Governor Cuomo, and will be effective sixty (60) days after gubernatorial approval.

In addition to the categories of paycheck deductions currently authorized under Section 193 of the Labor Law, for insurance premiums, retirement/benefit plan contributions, contributions to charitable organizations, U.S. Savings bond purchases and union dues, employees would also be allowed to authorize deductions for:

Note that the bill does not authorize several other categories of withholdings that had been proposed by The Business Council, such as for employee PACs and specialized tools.

The bill also separately allows for deductions for withholdings related to the repayment of pay advances and the recovery of pay overages, both of which will be subject to (and must wait adoption of) new regulations prepared by the state Labor Department. These new regulations will cover the amount and pace of repayments, employee notice requirements, and will require employers to have a dispute resolution process enabling an employee to dispute or delay repayments.

Note that the current Section 193 also allows for “similar payments for the benefit of the employee.”

Along with the expanded allowable deductions, this bill adds new administrative requirements as well:

The Administration has expressed its interest in working with The Business Council on implementation of these regulations.

As the process moves forward, please feel free to contact us on The Business Council’s HR Line at 800-332-2117 if you have any questions.