July 26, 2016
 
Question:

Hi Jennifer,
 
If we give an employee a loan can they repay on a payroll deduction?

Thanks in advance. 
M

Answer: 

Knowing you are in NY, M, I am answering with NY state law.  Readers from other states may have other answers so be sure to check or inquire if you are interested in the answer.  Yes, you can require repayment on payroll deduction, but with limitations.

See https://labor.ny.gov/formsdocs/wp/LS605.PDF

§ 193. Deductions from wages.
1. No employer shall make any deduction from the wages of an employee, except deductions which:
(d) repayment of advances of salary or wages made by the employer to the employee. Deductions to cover such repayments shall be made in accordance with regulations promulgated by the commissioner for this purpose, which regulations shall include, but not be limited to, provisions governing: the timing, frequency, duration, and method of such repayment; limitations on the periodic amount of such repayment; a requirement that notice be provided to the employee prior to the commencement of such repayment; a requirement that the employer implement a procedure for disputing the amount of such repayment or seeking to delay commencement of such repayment; the terms and content of such a procedure and a requirement that notice of the procedure for disputing the repayment or seeking to delay commencement of such repayment be provided to the employee at the time the loan is made. * NB Effective until November 6, 2015


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