Employment Compliance Reminders For 2014

January 2014





Beginning December 31, 2013, the minimum hourly wage rate for employees in New York State has increased from $7.25 per hour to $8.00 per hour. The minimum hourly wage rate will again increase to $8.75 per hour on December 31, 2014, and to $9.00 per hour on December 31, 2015.

Moreover, the minimum salary amounts that must be paid to New York employees who are exempt from New York’s overtime requirements as administrative or executive employees has increased to $600 per week effective December 31, 2013. Thereafter, the minimum salary will increase to $656.25 on December 31, 2014, and to $675 on December 31, 2015.

Employers should be aware that the New York State minimum wage now exceeds the federal minimum wage. Thus, although an employee’s hourly wages may comply with federal law, such wages may not comply with New York law.

Similarly, an employee paid a salary between the federal minimum of $455 per week and the New York minimum of $600 per week may qualify as “exempt” from overtime under federal law, yet may not qualify for the same exemption under New York law. In such circumstances, the employee is entitled to overtime and must be paid at a rate of at least one and one-half times the minimum hourly rate of $8.00 per hour for any hours worked in excess of 40 per week.

What This Means For You

Employers should review the compensation paid to their employees in New York to ensure compliance with the new minimum wage and salary obligations and should take the following steps:

  • Confirm the necessary payroll adjustments have been made and they are in compliance with the new minimum wage laws;
  • Update their minimum wage posters at the workplace and;
  • Ensure that their employees who are classified as “exempt” under the administrative or executive exemptions are being paid a salary of at least $600 per week in order to avoid violation of New York State’s overtime laws.


The New York State Department of Labor (“DOL”) has issued final regulations, effective October 9, 2013, concerning wage deductions (the “Regulations”). The Regulations explain how employers may make lawful deductions from employee wages and address the mandatory requirements for recovering overpayments due to mathematical or clerical errors and for repayment of salary advances.

Deduction for the Benefit of Employees

New York Labor Law Section 193(b) permits deductions from employee wages which are “expressly authorized in writing by the employee” and “are for the benefit of the employee.”

The statute enumerates the permissible deductions which are “for the benefit of the employee,” and also allows for “similar payments for the benefit of the employee.” The new Regulations clarify the meaning of “similar payments” explaining that, generally, these are deductions which provide financial or other support for the employee, the employee’s family, or a charitable organization. Such support must fall within one of the following enumerated categories:

  • Health and welfare benefits;
  • Pension and savings;
  • Charitable contributions;
  • Dues or assessments to a labor organization;
  • Transportation; and
  • Food and lodging.

Permitted deductions in these categories include fitness and health club membership dues, day care expenses, pharmacy purchases made at the employer’s business, purchases of food at employee cafeterias or vending machines, and discounted passes or other items that allow employees to use mass transit.

In addition, the Regulations explain that “convenience of the employee,” does not mean the deduction offers a “benefit” to the employee. Accordingly, check-cashing fees, for example, would be an unlawful wage deduction. The Regulations also set forth the several deductions which are specifically prohibited under Section 193(1)(b):

  • Repayment of loan advances and overpayments that are not in accordance with the Regulations;
  • Employee purchases of tools, equipment and attire required for work;
  • Recoupment of unauthorized expenses;
  • Repayment of employer losses, including for spoilage and breakage, cash shortages and fines or penalties incurred by the employer through the conduct of the employee;
  • Fines or penalties for tardiness, excessive leave, misconduct or quitting without notice;
  • Contributions to political action committees, campaigns and similar payments; and
  • Fees, interest or the employer’s administrative costs.

Deductions Must be Authorized by Employee
The Regulations also clarify what would be considered sufficient “authorization” from an employee under Section 193 (1)(b). Wage deductions can be authorized by a collective bargaining agreement or by a written agreement with the employee that is express, voluntary, and "informed." To be considered “informed,” the employee must receive advance written notice of all of the terms and conditions of the deduction, its benefit, and the details of the manner in which the deduction shall be made. Further, employees must receive a new notice whenever the amount of the deduction changes or there is a substantial change in the benefits of a deduction. However, where the nature of a deduction may fluctuate based upon a purchase, such as meals in the company cafeteria, the notice can list a monetary range of the lowest and highest amount that can be deducted.

Recovery of Overpayments
While an employer is permitted to make a wage deduction for an overpayment that is due to a “mathematical or other clerical error,” restrictive procedures with respect to the timing, frequency, method, permitted amount of recovery and notice must be followed:

  • An employer may recover overpayments made within eight (8) weeks prior to issuing the required “notice of intent” to recoup an overpayment.
  • Where the entire overpayment is less than or equal to the net wages in the next wage payment, the entire amount of the overpayment may be recouped in the next wage payment; otherwise, deductions for overpayments are limited to 12.5% of the gross wages (provided the deduction does not reduce wages below the statutory minimum wage rate).
  • Notice of intent to make a wage deduction must be given at least (3) three days prior to the deduction if the entire deduction will be taken in single wage payment, or (3) three weeks prior to the commencement of deductions that will be taken periodically.

The Regulations also require employers to adopt procedures for employees to dispute the overpayment and the terms of recovery or to seek to delay the recovery of the overpayment.

Deductions For Wage Advancements
The Regulations define an "advance” as the provision of money by the employer to the employee based on the "anticipation of the earning of future wages." Any provision of money by an employer that is accompanied by interest, a fee, or some amount consisting of anything other than the amount provided to the employee, would not constitute an "advance" for which a permitted wage deduction can be made.

There are detailed requirements and procedures governing repayment of an advance:

  • The employer and employee must agree, in writing, to the timing, duration, frequency, and method of recovery before the advance is given. The agreement may allow the employer to take a total reclamation of the advance through a deduction made from the last wage payment at the employee's termination.
  • Once an advance is given, "no further advance may be given or deducted until any existing advance has been repaid in full."

As with wage overpayments, the employer must implement a procedure whereby the employee can dispute the amount of the advance and frequency of deductions if he/she believes they are not in accordance with the parties’ written agreement.

What This Means For You
The Regulations provide critical guidance concerning permissible deductions of employee wages and set forth mandatory requirements and procedures concerning recovery of overpayments and repayment of salary advances. In light of the above, employers should take the following steps:

  • Review and update, as needed, existing wage deduction authorization forms to ensure they meet the new standards set forth in the Regulations;
  • Draft notice of intent forms that conform to the requirements set forth in the Regulations;
  • Prepare written agreements governing advances in accordance with the Regulations;•Institute internal dispute resolution procedures for employees to contest deductions for wage overpayments and advances in compliance with the Regulations;
  • Review policies and practices that are currently in place which may address these issues to ensure they are updated; and
  • Train managers and human resources staff so that they can comply with the Regulations and adhere to the record keeping requirements.


Beginning January 6, 2014, New Jersey employers with at least 50 or more employees including those employees which work outside of New Jersey must conspicuously post and distribute a gender equity notice (“Notice”) to all employees.

The Notice, which was published by the New Jersey Department of Labor and Workforce Development (“NJDOL”) last month, implements a 2012 amendment to the New Jersey Equal Pay Act and informs employees that employers may not discriminate against employees with respect to their pay, compensation, benefits, or terms, conditions or privileges of employment because of their sex. The Notice advises employees of their rights under federal and state laws and provides contact information for state and federal agencies.

A copy of the Notice with the precise language required by the NJDOL can be found here.

Compliance with the New Notice Requirement
Covered employers must comply with the following new Notice and distribution requirements:

  • Conspicuously Post the Notice by January 6, 2014:
    Covered employers must conspicuously post the Notice in a place accessible to all employees in all of the employer’s workplaces by January 6, 2014. The employer may post the Notice on its intranet or internet site, so long as the site is exclusively for employees and all employees have access to the site.
  • Written Notice to Existing Employees on or before February 5, 2014:
    Covered Employers are required to provide each employee with a written copy of the Notice upon first request. Covered employers must also provide a written copy of the Notice to all existing employees on or before February 5, 2014.
  • Written Notice to New Employees Hired after January 6, 2014:
    Covered employers must provide a written copy of the Notice to each employee who is hired after January 6, 2014 at the time of his or her hire.
  • Redistribute the Notice to all Employees Annually:
    Covered employers must provide employees with a written copy of the Notice annually, on or before December 31st of each calendar year.
  • Employees Must Acknowledge Receipt of the Notice:
    Covered employers must require employees to sign acknowledgment forms verifying that they have received the Notice and have read and understand its terms and return the signed acknowledgment form within 30 days of receipt. Electronic signatures are sufficient.

Employers may distribute the Notice through email, printed material, or through the employer’s internet site or intranet site, provided that the site is exclusively for its employees and that all employees have access to it.

In addition, employers must post and provide the Notice in English and Spanish, and any other language that the employer reasonably believes is the first language of a significant number of the employer’s workforce, provided that the NJDOL has issued a form of the Notice in that language.

What This Means For You
New Jersey covered employers should take the following steps to comply with the posting and distribution requirements regarding the Notice:

  • Post the Notice in each of their locations in an area that is accessible to all employees;
  • Prepare the Notice and accompanying acknowledgment forms for distribution to all employees;
  • Include the Notice and accompanying acknowledgment form to new hire paperwork for all employees hired after January 6, 2014; and
  • Put a procedure in place to meet the annual Notice requirements.

For more information on this issue or other employment matters, please contact:
Carol M. Goodman at [email protected] or +1 212 592 1465.

© 2014 Herrick, Feinstein LLP. This alert is published by Herrick, Feinstein LLP for information purposes only. Nothing contained herein is intended to serve as legal advice or counsel or as an opinion of the firm.