Federal Law on Pay Deductions
Under federal law, specifically the Fair Labor Standards Act (FLSA), employers are prohibited from making deductions from an employee’s paycheck for reasons that would result in the employee receiving less than the minimum wage or overtime pay they are entitled to. The FLSA provides for two types of deductions: those that are mandatory and those that are voluntary.
A. Mandatory Deductions: Employers can make mandatory deductions from an employee’s paycheck for legally required purposes such as taxes, Social Security, and court-ordered garnishments. These deductions must comply with applicable federal and state laws.
B. Voluntary Deductions: Employers may deduct from an employee’s paycheck for authorized deductions that are voluntarily agreed upon in writing by the employee. These deductions typically include health insurance premiums, retirement plan contributions, or other benefits chosen by the employee.
New York State Law on Pay Deductions
In addition to federal law, New York state law offers further protections for employees regarding pay deductions. The New York Labor Law (NYLL) contains provisions that restrict employers from making certain deductions without the employee’s consent.
A. Permissible Deductions: Under specific circumstances outlined in the NYLL, employers in New York may make deductions for items such as insurance premiums, pension or health and welfare benefits, contributions to charitable organizations, or payments for dues or assessments to a labor organization.
B. Restrictions on Deductions: Employers in New York are prohibited from making deductions for matters such as cash shortages, breakage, required uniforms, or lost or stolen property unless the employee expressly agrees to such deductions in writing.
Remedies for Illegal Pay Deductions
When employees face illegal pay deductions, they have several remedies available to them to enforce their rights and seek compensation.
A. Internal Complaints: Employees can address the issue by filing a complaint with their employer’s human resources department or management. This allows the employer an opportunity to rectify the situation.
B. Wage and Hour Claims: Employees can file a complaint with the U.S. Department of Labor’s Wage and Hour Division or the New York State Department of Labor. These agencies investigate claims of wage violations and may recover unpaid wages and damages on behalf of the employee.
C. Private Lawsuits: Employees can pursue a private lawsuit against their employer for illegal pay deductions. These lawsuits may seek remedies such as back pay, liquidated damages, attorney fees, and court costs.