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New York Wage Law Update

12/07/2014 | Winter 2014 Newsletter
New York employers should be aware of two recent changes in the wage laws affecting New York businesses which go into effect this year. 

New Paid Sick Leave Law for New York City
Effective April 2014, New York City will become the latest U.S. city to require paid sick leave for many private sector employees.
Initially, the law only applies to companies with 20 or more employees. Starting October 15, 2015, the threshold number will drop to 15 or more employees. The law only applies to employees who work more than 80 hours in a year.

The law provides that covered employees shall accrue one hour of paid sick leave for every thirty hours worked. This means that a full-time employee who works a forty hours each week the entire year will accrue almost 70 hours or 8.67 paid sick days per year.

Employees can only use up to 40 hours or five days per calendar year. Employers can require employees to provide reasonable notice, and can require reasonable documentation signed by a licensed health care provider for an absence of more than three consecutive work days. Unused sick leave can carry over from year to year but employees can only use up to 40 hours per year. The law does not require employers to pay employees for unused accrued sick leave when they are terminated.

Employers should review their policies to make sure they comply with the new law. The new law sets the minimum requirements for covered employers, and employers are not prohibited from offering more generous sick leave policies.

New State Regulations on Wage Deductions
At the end of last year, New York’s Department of Labor issued new regulations which modify and clarify the rules concerning the types of deductions which employers can take out of an employee’s paycheck.

The biggest change is that the regulations now permit employers to make deductions for advances, but only if the employer complies with certain procedural requirements, which include the following: The employer and employee must agree in writing to the timing and duration of the repayment deductions before the advance; the employer must provide the employee with a procedure in writing by which the employee can challenge any deduction; and the employer may not advance the employee additional wages until the original advance has been repaid in full.

The new regulations provide additional guidance as to what types of wage deductions are permitted. Provided that an employee provides written authorization, an employer is permitted to make deductions for the following:
health and welfare benefits, pension and retirement benefits, insurance premiums and prepaid legal plans, bona fide charitable contributions, purchase of U.S. bonds, union dues, health club dues, day care, discounted parking or discounted mass transit passes, cafeteria and vending machine purchases at work, or ”similar benefits for the benefit of the employee.”

In a change from the previous law, the new regulations provide that permitted ”similar benefits” are not necessarily limited to the specific types of deductions that are named in the statute. Rather, under the regulations, deductions for similar benefits might include deductions not specifically listed in
the statute as long as the purpose of the deduction is to provide financial or other support for the employee, the employee’s family or a charitable organization, although it will generally not include deductions intended for the employer’s financial gain.

The new regulations also confirm the list of prohibited wage deductions, which includes deductions for tools; equipment and attire required for work; recoupment of unauthorized expenses; fines or penalties for tardiness, excessive leave, misconduct or quitting without notice; political contributions; repayment for employer losses, including caused by breakage, cash shortages, spoilage, and fines or penalties incurred by the employer through the conduct of the employee; administrative costs; or repayment of loans or advances not made in accord with the regulations’ procedural requirements.

Employers should exercise caution to ensure that any wage deductions are permitted under the new regulations.

About the author: David T. Azrin is a partner at Gallet Dreyer & Berkey LLP. Mr. Azrin represents a range of business clients and individuals on employment, trademark, and franchise law matters. Mr. Azrin is the sponsor of the International Franchise Association’s franchise business network educational program in the New York City area. Mr. Azrin has been repeatedly named one of the top 125 franchise attorneys (”Legal Eagle”) by the editorial board of Franchise Times magazine. Mr. Azrin can be reached at dta@gdblaw.com.