- The employer must provide notice of its intent to make deductions either three days or three weeks before the deduction, depending on the amount to be deducted. Notice must include the amount overpaid in total and per pay period, the total amount to be deducted and the date and amount of each deduction.
- Notice must be made within eight weeks of the overpayment, although the wage deductions may continue for up to six years from the original overpayment.
- Employees must be given notice that the overpayment may be contested, including the deadline and procedure for challenging the employer’s determination.
- If the overpayment is less than or equal to the net wages earned in the next pay period, the employer may recover the entire amount in that next wage payment. However, if the overpayment exceeds the net wages in the next pay period, the employer may only recover up to 12.5% of gross wages earned in that wage payment, and the deduction may not reduce the effective hourly rate below minimum wage.
- Employers must adopt procedures for employees to dispute the overpayment, the terms of recovery and/or the timing of the recovery. For unionized employers, dispute resolution provisions in collective bargaining agreements which provide at least as much protection to the employee shall be deemed to be compliant with the law.
Tags: General • Wage and Hour, Fair Labor Standards Act • new york wage deduction • wage deduction • overpaid wages • new york overpaid wages