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New York Wage Deductions: What Employers Can and Cannot Deduct (2025)

When you check your paycheck and see deductions beyond the usual taxes, you might wonder if your employer is allowed to take that money. In New York, the answer is often “no.” New York wage deductions are strictly regulated under state law, and employers can only deduct money from your paycheck in very limited circumstances.

New York Labor Law Section 193 creates strong protections for workers. The law assumes that deductions are illegal unless they fall into specific approved categories. Most deductions require your written permission before a single dollar can be taken. If your employer has been making unauthorized deductions, you have the right to recover that money—plus additional damages.

This guide explains exactly what employers can and cannot deduct from your paycheck in New York, how the written authorization process works, and what steps you can take if you’ve experienced illegal paycheck deductions.

New York’s Strict Wage Deduction Rules

New York takes a worker-friendly approach to wage deductions. Under Labor Law Section 193, employers face tight restrictions on taking money from employee paychecks. The law establishes three narrow categories of permitted deductions:

  1. Deductions required by law (taxes, court orders, garnishments)
  2. Deductions for the benefit of the employee that are authorized in writing
  3. Deductions authorized by a representative organization (like union dues)

If a deduction doesn’t fit into one of these categories, it’s illegal—period. There’s no gray area. The burden falls on the employer to prove a deduction is legal, not on you to prove it’s illegal.

This protective framework exists because New York recognizes the power imbalance between employers and employees. Without these rules, employers could shift business costs and losses onto workers through paycheck deductions. New York law prevents this by requiring employers to bear the normal risks and costs of running a business.

The state’s approach is more protective than federal law. While the Fair Labor Standards Act allows certain deductions, New York wage deduction laws provide additional safeguards that give workers stronger rights.

Legal Deductions: What Employers CAN Deduct

Employers can make specific types of deductions from your paycheck without violating New York law. Here are the categories of legal deductions:

Required by Law

These deductions are mandatory and don’t require your permission:

  • Federal, state, and local income taxes
  • Social Security and Medicare taxes (FICA)
  • Court-ordered wage garnishments
  • Child support payments
  • Tax levies from the IRS or state
  • Bankruptcy payments ordered by a court

Authorized in Writing by You

With your written authorization, employers can deduct for items that benefit you:

  • Health insurance premiums
  • Retirement plan contributions (401k, pension)
  • Life insurance premiums
  • Disability insurance
  • Flexible spending account contributions
  • Employee stock purchase plans
  • Charitable donations you’ve requested
  • Direct deposit or paycard fees (only if you authorized them)

Union Dues and Fees

If you’re represented by a union, your employer can deduct union dues and initiation fees as authorized by your collective bargaining agreement. This falls under deductions authorized by a representative organization.

Loan or Advance Repayment

If you received a loan or advance from your employer and signed a written agreement allowing repayment through payroll deduction, the employer can make those deductions. However, the agreement must be voluntary and cannot reduce your pay below minimum wage.

The key requirement for most legal deductions is written authorization. A verbal agreement isn’t enough. The authorization must be on paper, signed by you, and created before the deduction begins.

Illegal Deductions: What Employers CANNOT Deduct

New York law prohibits employers from deducting money for ordinary business expenses and losses. These deductions shift the cost of doing business from the employer to the employee—which violates the fundamental principle that employers must bear business risks.

Cash Register Shortages

Your employer cannot deduct money for cash register shortages unless you signed written authorization. Even with authorization, some courts have found these deductions illegal because they shift business risk to employees. If your register is short, your employer must investigate and address the issue through proper management, not by docking your pay.

Damaged or Broken Equipment

If you accidentally break equipment or damage company property, your employer cannot automatically deduct the cost from your paycheck. Breaking something doesn’t give your employer the right to make deductions without your written permission—and even then, the deduction may be challenged as illegal.

Uniforms Required by the Employer

When your employer requires you to wear a specific uniform (especially one with the company logo), they must provide it at no cost to you. They cannot charge you for the uniform or deduct its cost from your wages. This rule protects workers from having to pay for clothes they wouldn’t otherwise buy.

Tools of the Trade

In most cases, employers cannot deduct the cost of tools necessary for your job. If you’re a mechanic, carpenter, or technician who needs specific tools to perform your work, your employer must provide them or reimburse you for their cost.

Customer Walkouts or Dine-and-Dash

Restaurant and hospitality workers cannot be forced to pay for customers who leave without paying. This is a business loss that the employer must absorb, not shift to servers or bartenders through wage deductions.

Breakage and Spillage

If you drop a tray of dishes or spill merchandise, your employer cannot deduct the cost. Accidents happen in any workplace, and the risk of occasional breakage is a normal cost of doing business.

Training Costs

Employers generally cannot deduct training costs from your wages, even if you leave soon after being trained. The exception is if you signed a written agreement before the training that specifically allows such deductions—and even then, the agreement must be carefully drafted to be enforceable.

Business Losses

General business losses, slow sales, or poor company performance cannot be passed to employees through wage deductions. The risk of business failure belongs to the owner, not the workers.

The Written Authorization Requirement

Written authorization is the gateway for most legal wage deductions in New York. But not just any authorization counts. The law requires specific elements for a deduction authorization to be valid.

Must Be in Writing

Verbal permission doesn’t satisfy New York wage deduction laws. The authorization must be a physical or electronic document that you sign. A conversation with your boss, even if witnessed, isn’t enough.

Must Be Before the Deduction

The authorization must exist before the first deduction occurs. Your employer cannot make a deduction and then ask you to sign authorization afterward. The sequence matters—authorization first, deduction second.

Must Be Voluntary

Your employer cannot coerce you into signing authorization. If you’re told “sign this or you’re fired,” the authorization isn’t voluntary and won’t protect the employer. True voluntary consent means you have a genuine choice without fear of retaliation.

Must Be Specific

The authorization should clearly state what’s being deducted, how much, and for how long. Vague authorizations like “the employer may deduct amounts as needed” don’t meet the legal standard. You need to know exactly what you’re agreeing to.

Can Sometimes Be Revoked

For certain voluntary deductions (like charitable contributions), you may have the right to revoke your authorization. The employer must honor reasonable revocation requests, though some deductions tied to benefits (like health insurance) may only be changeable during specific enrollment periods.

Even with proper written authorization, some deductions may still be illegal. If the deduction is for something that’s primarily a business expense or shifts business risk to you, courts may find it invalid even with your signature.

Uniforms and Equipment: Special Rules

Uniforms and work equipment receive special protection under New York law because requiring workers to pay for them effectively reduces their hourly wage.

Required Uniforms Must Be Free

If your employer requires you to wear a specific uniform—particularly one with a company logo or distinctive design—they must provide it at no cost. You cannot be charged a purchase price, rental fee, or deposit for mandatory uniforms.

This rule ensures that uniform requirements don’t reduce your effective hourly rate below minimum wage. If you earn $16.50 per hour in New York City but have to spend $100 on uniforms, your true compensation is lower than minimum wage when you factor in the uniform cost.

What Counts as a Uniform

A “uniform” for legal purposes means clothing distinctive to the employer. A shirt with the company logo is a uniform. A requirement to wear “black pants and black shoes” generally is not, because those are ordinary clothes you might already own and wear elsewhere.

Cleaning and Maintenance

If your employer requires you to clean or maintain uniforms at home, they may need to reimburse you for those costs. Requiring you to pay for uniform cleaning effectively shifts a business expense to you.

Tools and Equipment

For jobs requiring specialized tools, New York law generally requires employers to provide them or reimburse employees for their cost. If you’re hired as an electrician, you shouldn’t have to invest $500 in tools before you can start work.

Safety Equipment Exception

Some courts have found that employers can require employees to provide basic safety equipment (like steel-toed boots) if those items have value beyond the specific job. The reasoning is that safety boots can be worn at future jobs, so requiring employees to buy them doesn’t solely benefit the employer.

Equipment Deposits

Some employers try to charge deposits for equipment like uniforms, tools, or keys. These deposits are problematic under New York law. If the deposit is really just a way to charge for the equipment, it’s illegal. If it’s a true deposit that will be fully refunded when the equipment is returned, it may be permissible—but employers often violate the law by failing to return deposits or making unauthorized deductions from them.

Cash Shortages and Till Shortages

Restaurant workers, retail employees, and anyone who handles cash often face pressure when registers come up short. Employers sometimes respond by deducting shortages from employee paychecks. In New York, this practice is heavily restricted.

No Automatic Deductions

Your employer cannot automatically deduct cash shortages from your paycheck, even if you were the only person using the register. The employer must have written authorization from you allowing such deductions.

Questionable Even With Authorization

Even if you signed authorization allowing deductions for shortages, New York courts have questioned whether such agreements are enforceable. The reasoning is that cash shortages could result from employer accounting errors, theft by others, or simple mistakes—all of which are business risks the employer should bear, not risks shifted to employees.

Presumption of Innocence

New York law presumes employees aren’t responsible for cash shortages. If money is missing, the employer should investigate. They might find the shortage resulted from a counting error, a transaction mistake, or theft by someone else. Making an employee pay for an unexplained shortage violates the principle that the employee is innocent until proven otherwise.

Pattern of Shortages

If shortages happen repeatedly with one employee, the employer should address it through progressive discipline (warnings, retraining, or termination) rather than wage deductions. If they believe the employee is stealing, they should report it to law enforcement, not dock pay.

Business Risk Belongs to the Employer

The fundamental principle is that business risk belongs to business owners. If a customer uses a counterfeit bill, if the computer system miscounts, or if someone steals from the register, those are risks of operating a business. Employers cannot transfer those risks to minimum-wage workers through paycheck deductions.

Overpayment Recovery Rules

What happens if your employer accidentally pays you too much? Can they simply take the money back from your next paycheck? New York law provides some protection even in overpayment situations.

Employer Can Recover Overpayments

Employers do have the right to recover genuine overpayments. If they paid you for 50 hours when you only worked 40, or if a computer error doubled your paycheck, they can reclaim the excess amount.

Must Notify You First

Before making any deduction for overpayment recovery, your employer must notify you. The notice should explain what the overpayment was, when it occurred, and how much they plan to recover. Surprise deductions without explanation violate your rights.

Reasonable Repayment Plan

Employers cannot recover the entire overpayment in one paycheck if doing so would create financial hardship. New York encourages employers to set up reasonable repayment plans that recover the overpayment gradually over several pay periods.

Cannot Reduce Below Minimum Wage

Even when recovering legitimate overpayments, the deduction cannot reduce your hourly rate below minimum wage for the current pay period. Your employer must prioritize paying you minimum wage for current work before recovering past overpayments.

Disputed Overpayments

If you dispute whether an overpayment actually occurred, your employer should not make deductions while the dispute is pending. They may need to resolve the dispute through the court system rather than through self-help deductions.

Timing Matters

The longer an employer waits to recover an overpayment, the weaker their claim becomes. If they paid you an extra $500 two years ago and never said anything, you may have a defense that you relied on that money and it’s unfair to suddenly demand repayment.

Deductions Cannot Reduce Pay Below Minimum Wage

One of the most important protections in New York wage deduction law is the floor rule: deductions cannot reduce your effective hourly rate below the minimum wage for any pay period.

Current Minimum Wage Rates (2025)

As of January 1, 2025, New York’s minimum wage is:

  • $16.50 per hour in New York City, Long Island, and Westchester County
  • $15.50 per hour in the rest of New York State

These are the floors that wage deductions cannot breach.

How the Calculation Works

To determine if a deduction is legal, calculate your effective hourly rate after the deduction:

  1. Start with your gross wages for the pay period
  2. Subtract all deductions
  3. Divide by hours worked

If the result is below minimum wage, the deduction is illegal.

Example

You work 40 hours per week in Buffalo at $17 per hour. Your gross pay is $680. Your employer wants to deduct $100 for a uniform.

After the deduction, you’d have $580 for 40 hours of work, which equals $14.50 per hour. This is below the $15.50 minimum wage for upstate New York, so the deduction is illegal.

Applies to Each Pay Period

The minimum wage floor applies to each individual pay period, not averaged over time. Your employer cannot make a large deduction one week that brings you below minimum wage and then “make it up” by paying you extra the next week.

Required Deductions Still Apply

Legally required deductions (taxes, garnishments, child support) are exempt from the minimum wage floor rule. These can reduce your take-home pay below minimum wage. The floor only applies to voluntary or employer-initiated deductions.

Protects Against Employer Cost-Shifting

This rule prevents employers from advertising jobs at minimum wage but then reducing effective pay below minimum wage through deductions. Without this protection, unscrupulous employers could hire workers at $16.50 per hour and then deduct $3 per hour for uniforms, tools, or other expenses, leaving workers with an effective rate of $13.50—which would be illegal.

Final Paycheck Deductions

When you leave a job, your final paycheck receives special protection under New York law. Employers cannot use your departure as an opportunity to deduct for various claimed debts or unreturned property without following proper procedures.

Standard Deductions Still Apply

Your employer can still take standard legal deductions from your final check: taxes, authorized insurance premiums, 401(k) contributions, and other deductions that were already in place.

Unreturned Property

If you fail to return company property (laptop, phone, keys, uniform), can your employer deduct its value from your final check? Generally, no—unless you signed a written authorization specifically allowing this type of deduction.

Some employers require employees to sign agreements at hiring stating that the cost of unreturned equipment may be deducted from final pay. Even these agreements are legally questionable in New York, as they may constitute an illegal shifting of business risk.

Equipment Deposits

If you paid a deposit for equipment when you were hired, your employer must return the full deposit with your final paycheck if you return the equipment in good condition. They cannot make deductions for “normal wear and tear” or minor damage.

If the equipment is significantly damaged or not returned, the employer may be able to keep some or all of the deposit—but only if the original deposit agreement was properly structured as a refundable deposit, not an illegal equipment charge.

Training Cost Recovery

Some employers try to deduct training costs from final paychecks, especially if an employee leaves shortly after being trained. This is generally illegal in New York unless you signed a very specific written agreement before the training began that clearly authorized such deductions.

Even with an agreement, courts scrutinize training cost deductions carefully. If the training primarily benefits the employer (teaching you to use their specific systems) rather than providing you with generally marketable skills, deductions may be invalid.

Vacation Payout Deductions

If your employer owes you unused vacation pay, they cannot make unauthorized deductions from that payment. Accrued vacation time is earned wages, and the same rules protecting regular wages apply.

Cannot Delay Final Pay

Your employer cannot withhold your final paycheck while they “figure out” what deductions to make. New York law requires final paychecks to be paid by the next regular payday. Holding your check hostage until you pay for unreturned property or disputed charges is illegal.

Recovering Illegal Deductions

If your employer has made illegal deductions from your paycheck, New York law provides several ways to recover that money—plus additional damages.

File a Claim With the New York Department of Labor

The fastest and cheapest option is filing a wage claim with the New York State Department of Labor (NYDOL). The process is free, and you can file online, by mail, or in person at a district office.

The NYDOL will investigate your claim, contact your employer, and attempt to recover the illegal deductions on your behalf. If the Department finds in your favor, they can order your employer to repay the deducted amounts.

Six-Year Statute of Limitations

You can recover illegal wage deductions going back six years from when you file your claim. This is one of the longest statutes of limitations in the country for wage claims, giving workers substantial time to assert their rights.

Liquidated Damages Up to 100%

Under New York Labor Law Section 198, you may be entitled to liquidated damages equal to 100% of the illegally deducted wages. This means if your employer illegally deducted $5,000 over the past three years, you could recover $10,000: the original $5,000 plus $5,000 in liquidated damages.

Liquidated damages are designed to punish employers for wage violations and compensate employees for the time value of money and the hassle of pursuing a claim.

Attorney’s Fees

If you prevail in a wage deduction claim, your employer may be ordered to pay your attorney’s fees and costs. This levels the playing field, allowing workers to hire lawyers without worrying about being stuck with legal bills.

Private Lawsuit Option

Instead of filing with the NYDOL, you can sue your employer directly in court. This option makes sense if your claim is large, complex, or involves other legal issues beyond just wage deductions.

A private lawsuit can also be appropriate if the NYDOL investigation isn’t moving forward or if you want more control over the case strategy.

Treat Illegal Deductions as Unpaid Wages

New York law treats illegal deductions the same as unpaid wages. If your employer deducted $100 illegally from your paycheck, it’s legally equivalent to not paying you $100 of wages you earned. This means all the remedies available for unpaid wages (liquidated damages, attorney’s fees, interest) also apply to illegal deductions.

No Retaliation

Your employer cannot fire you, discipline you, or retaliate against you for complaining about illegal wage deductions or filing a claim. Retaliation is itself a separate violation of New York labor law that can result in additional damages.

Common Illegal Deduction Scenarios

Understanding illegal wage deductions is easier with real-world examples. Here are common scenarios where New York employers violate the law:

Scenario 1: Restaurant Requires Server to Pay for Walkout

Maria works as a server at a busy restaurant. A table of customers walks out without paying their $75 bill. Her manager deducts $75 from her next paycheck.

Why It’s Illegal: Customer walkouts are a business risk, not an employee cost. The restaurant must bear the loss, not shift it to the server. Even if Maria signed authorization allowing such deductions, courts would likely find it unenforceable as an illegal transfer of business risk.

Scenario 2: Retail Worker Pays for Register Shortage

James works at a clothing store. At the end of his shift, the register is $40 short. His employer deducts $40 from his paycheck without explanation.

Why It’s Illegal: Cash shortages require written authorization, which James didn’t provide. Even with authorization, the deduction is questionable because register shortages can result from many causes (employer counting errors, other employees, theft) that aren’t James’s responsibility.

Scenario 3: Mechanic Required to Buy Tools

Angela is hired as an automotive mechanic. On her first day, she’s told she needs to purchase $800 in specialized tools before she can begin work. Her employer deducts $200 from her first four paychecks to cover the tools.

Why It’s Illegal: Employers must provide tools necessary for the job or reimburse employees for their cost. Requiring Angela to buy tools (or deducting for them) shifts a business expense to her. Additionally, the deductions reduce her effective hourly rate below minimum wage.

Scenario 4: Uniform Fees for Hotel Housekeeping

Carmen works as a housekeeper at a hotel. She’s required to wear a uniform with the hotel logo. The hotel charges her $120 for two uniforms and deducts it from her first paycheck.

Why It’s Illegal: When employers require specific uniforms (especially with company logos), they must provide them free of charge. The hotel cannot charge Carmen for uniforms or deduct their cost from her wages.

Scenario 5: Manager Deducts for Training After Employee Quits

David works for a marketing company. After receiving two weeks of training, he gets a better job offer and quits. His employer deducts $1,500 from his final paycheck for “training costs.”

Why It’s Illegal: Unless David signed a written agreement before the training specifically authorizing deductions for training costs if he left within a certain period, the employer cannot make this deduction. Even with such an agreement, courts carefully scrutinize whether it illegally shifts business costs to employees. Training that primarily benefits the employer (learning their systems and procedures) is a business expense, not an employee debt.

What to Do If You’re Experiencing Illegal Deductions

If you believe your employer is making illegal deductions from your paycheck, take these steps to protect your rights:

1. Keep Detailed Records

Save all pay stubs showing the deductions. Document when deductions started, how much was taken, and what explanation (if any) your employer provided. Keep copies of any documents you signed regarding deductions.

2. Request an Explanation in Writing

Ask your employer to explain in writing what the deductions are for and what legal authority they have to make them. Having their explanation in writing can be valuable evidence later.

3. Review Your Written Authorizations

Look at any forms you signed when you were hired or during employment. Did you authorize these deductions? Was the authorization specific and voluntary? Remember that some deductions are illegal even with written authorization.

4. Calculate if Deductions Bring You Below Minimum Wage

Figure out your effective hourly rate after deductions. If it’s below New York’s minimum wage for your region, the deductions are clearly illegal.

5. File a Claim With the New York Department of Labor

Visit the NYDOL website or call your nearest district office to file a wage claim. The process is free and designed for workers to use without lawyers, though you can certainly consult an attorney if you prefer.

6. Consider Consulting an Employment Attorney

Many employment lawyers offer free consultations for wage claims. Because the law allows recovery of attorney’s fees if you win, lawyers may take your case on a contingency basis (you only pay if you recover money).

7. Don’t Wait Too Long

While New York’s six-year statute of limitations is generous, don’t wait unnecessarily. Employers can go out of business, destroy records, or become harder to collect from over time. The sooner you act, the better your chances of full recovery.

8. Know Your Retaliation Protections

Your employer cannot legally fire you or discipline you for complaining about wage deductions or filing a claim. If retaliation occurs, document it immediately—it’s a separate violation for which you can recover damages.

Legal Disclaimer

This article provides general information about New York wage deduction laws and is not legal advice. Wage and hour law is complex, and specific situations may involve additional legal considerations not covered here.

If you’re experiencing wage deductions and are unsure whether they’re legal, consider consulting with a New York employment attorney who can review your specific circumstances and advise you on your rights and options. Many employment lawyers offer free initial consultations for wage claims.

The information in this article is current as of November 2025. Labor laws change, and you should verify current requirements with the New York Department of Labor or a qualified attorney.

Related Resources:

If your employer has made illegal deductions from your paycheck, you have the right to recover that money. The New York Department of Labor can help, and employment attorneys throughout the state are available to assist with wage claims. Don’t let illegal deductions go unchallenged—New York law is on your side.