MDNews - Long Island

++++++++++++++++++ + + ++++++++++++++++++ LEGAL EASE +++ +++ An Employment By Steven M. Berlin and Jeanette Antico W HAT IF A medical office or hospital pays an employee too much? Until recently, there were limited options, often putting an employer at risk of not recouping the overpayment or violating the law. That has now changed thanks to a new law recently signed by Gov. Andrew Cuomo that expands the list of permissible deductions from wages. Before this change, New York Labor Law Section 193 and opinions issued by the New York State Department of Labor prohibited an employer from deducting overpayment from an employee's wages. An employer was left with two options to recoup the overpayment. The first option required an employer to request the employee pay back the overpayment and clearly communicate that the employee's refusal to do so will not in any manner result in any disciplin- ary or retaliatory action. The second option was for the employer to sue the employee in civil court. If an employer were to choose to proceed with the first option, prior to accepting any overpay- ment via a separate payment from the employee, the employee had to provide authorization and acknowledge in writ- ing that he/she had been overpaid, was requested to pay back the overpayment amount, and was informed that he/ she would not be subject to discipline or retaliation for refusing to repay the overpayment amount. 12 | Long Island MD NEWS s MDNEWS.COM Lawyer's Prescription: How to Recover Overpayment of Wages and Other Wage Deductions Also, under old Section 193, while deductions for wage overpayment were prohibited, wage deductions were permit- ted for: insurance premiums; pension or health and welfare benefits; contributions to charitable organizations; payments for United States bonds; payments for dues or assessments to a labor organization; and "similar payments for the benefit of the employee." On September 7, 2012, Gov. Cuomo signed a bill that amends Section 193, addressing, among other issues, the recouping of overpayment from an employee. Of note, the new law will not go into effect until November 7, 2012, and is also subject to renewal after three years. The new law will permit wage deductions to allow for recovery of wage overpayment where the overpayment is due to the employer's mathematical or other clerical error. Voluntary authorization for the wage deduction must be acknowledged in writing by the employee and can only be given following receipt by the employee of written notice of all of the terms and conditions of the payment and/or its benefits and the details of the manner in which deductions will be made. The writ- ten authorization must be maintained by the employer for the duration of the employee's employment and for six years after employment ends. Additionally, the employee has the right to revoke authorization at any time. Further, an employer will now be obligated to implement a procedure that employees may use to dispute the amount of the deductions with notice of this procedure being given prior to any deductions. These same requirements also apply to other permitted deductions, and the new Section 193 has expanded this list to include: prepaid legal plans; purchases made at events sponsored by a bona fide charity that is affiliated with the employer (provided that at least 20% of the event's profits are contributed to such charity); discounted parking or discounted passes, tokens, fare cards, vouchers, or other items that enable an employee to use mass transit; dues for a fitness center, health club or gym membership; and tuition, room and board, and fees for preschool, nursery, primary, secondary, and postsecondary educational institutions; daycare and other before-school and after-school expenses. Of particular interest to hospitals, wage deductions are now permitted for: payments for housing provided at no more than market rates by nonprofit hospitals or their affiliates; pharmacy purchases at the employer's place of business; and by hospital, college and university employers for employee purchases at a cafeteria, gift shop and vending machine at the employer's place of business. Steven M. Berlin is head of Martin Clearwater & Bell LLP's Employment and Labor Practice Group. Jeanette Antico is a senior associate with the firm. s

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