What deductions can employers legally take from your paycheck?

If your paychecks seem to be getting smaller, consider taking a line-by-line look at the deductions coming out of your wages. Employers are permitted to make deductions, but only in limited circumstances and for specific reasons.

The New York statute addressing employee wage deductions is long, but below are some key points.

Four legal types of deductions

Under New York law, employers may only deduct from your wages in the following four circumstances.

  1. Deductions authorized by the employee and for their benefit
  2. Income withholdings per government laws, regulations or rules
  3. Deductions for the repayment of any salary advances the employee obtained
  4. Deductions to recover overpayments arising from clerical or mathematical errors

Some examples of allowable deductions include:

  • Tax withholdings
  • Third-party wage garnishments
  • Retirement and health care benefits
  • Food and lodging in applicable cases

Although such deductions may be lawful, you have the right to authorize or at least know about them. If they occur without your knowledge or authorization, your employer may be violating state employment laws.

Examples of prohibited deductions

Often, it can help to know what deductions employers may not make. Examples of improper deductions include those made:

  • To recover theft losses
  • To recover cash register shortages
  • To penalize employees for misconduct
  • To penalize or fine employees for tardiness
  • To recover losses due to spoilage or damage

An ideal tool for preventing wage theft, improper deductions and other employment law violations is knowledge. A sufficient understanding of labor statutes ensures you have the best chance of identifying employer mistreatment.

With experienced legal guidance, you can become more familiar with employment laws and work to find a remedy for any labor law violations you have experienced.

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