New York Issues Proposed Regulations Expanding Paycheck Deductions

What do you do when you accidentally overpay an employee? Can you deduct the overpayment from the employee's next paycheck? Until very recently, the answer in New York State was a resounding "no." The scope of permissible deductions from employees' wages was exceedingly limited. Although the Legislature expanded the scope of permissible deductions in June 2012 to include, among other things, deductions for various advances and, in certain circumstances, overpayment of wages (as more fully described here), reliance on the new law has been stymied by the State Department of Labor's utter silence concerning the law's implementation.

On May 22, 2013, the Department finally broke its silence, publishing the long-awaited proposed guidance and giving employers their first a glimpse into the regulations interpreting the new law. Specifically, the proposed guidance would: