Wage protection laws in New York: A look at Part 195, your shield against unfair pay cuts and deductions

August 2, 2023 Rob Abruzzese

Unemployment Insurance Services offices at 250 Schermerhorn St. in Downtown Brooklyn. Photo: Paul Frangipane/Brooklyn Eagle

Unemployment Insurance Services offices at 250 Schermerhorn St. in Downtown Brooklyn. Brooklyn Eagle photo by Paul Frangipane

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In New York State, employees can take solace in the strength of Labor Law’s Part 195, a statute governing authorized deductions from wages. This regulation, which applies to all employers and their employees — except for government agencies — establishes comprehensive guidelines around deductions for the benefit of employees, recovery of overpayments due to clerical errors and repayment of wage advances.

Part 195 of Title 12 of the Official Compilation of Codes, Rules, and Regulations of the State of New York (Part 195) creates safeguards to ensure the rights and incomes of employees are preserved, establishing explicit categories of legal wage deductions.

Employers cannot make any deductions from wages except those that align with these categories, which include deductions made under governmental law or regulation, those authorized by the employee for their own benefit, deductions for recovery of overpayments, and deductions for repayment of wage advances.

Additionally, the law stipulates that employers cannot make any charge against wages or require employees to make any payment by a separate transaction unless it is permitted under this part or required under any current collective bargaining agreement.

A critical component of Part 195 are the protections it provides against unregulated deductions. Prohibited deductions include those not in accordance with Subpart 195-5, such as repayments of loans; advances; overpayments; employee purchases of tools, equipment and attire required for work; recoupment of unauthorized expenses; and repayment of employer losses — whether from spoilage and breakage, cash shortages, or fines incurred by the employer through the employee’s conduct.

Part 195 also prohibits employers from penalizing employees by deducting wages for tardiness, excessive leave, misconduct or quitting without notice. Further, it bars deductions for contributions to political action committees and campaigns, fees, interest or the employer’s administrative costs.

In a bid to ensure transparency, Section 195-5.3 requires that any authorizations, notices, responses, replies or determinations under this part can be given in writing, email or other electronic means. These statements must be clear, readily understood and in a font size no smaller than 12 points. Moreover, the employer is obligated to keep a record of any such authorization for at least six years after the employment relationship ends.