Articles Posted in November, 2015

As the end of the year rapidly approaches, new statutes affecting employers and employees are set to become effective.  Among them is a New York City ordinance, titled “Mass Transit Benefits Law,” which requires every employer with twenty or more full-time employees in New York City to offer those full-time employees the option to use pre-tax earnings to purchase “qualified transportation fringe benefits,” except for qualified parking.   The law defines “full-time employees” as “employees who work an average of thirty hours or more per week for such employer for such period of time as the commissioner establishes by rule.”  Although final rules have not been published, the proposed rules provide that to qualify as a full-time employee, the employee must have worked an average of 30 hours or more per week in the most recent four weeks, any portion of which was in New York City, for a single employer.”

The law entitles only those employees who are eligible to receive “qualified transportation fringe benefits” under the Internal Revenue Code to be offered the option to purchase them.  Consequently, the ordinance does not require employers to offer such pre-tax transportation benefits to independent contractors, partners and two percent shareholders of S-corporations.  Should the Internal Revenue Code redefine the meaning of qualified transportation fringe benefits at some point in the future, that revision would  apply to the New York City ordinance also.

Temporary help firms are specifically addressed in the proposed regulations , because their employees are generally sent to work at various locations and employers.  According to the ordinance, a temporary help firm that provides a full-time employee to another organization will be the employer for purposes of complying with the statute, even if the organization/client does not have the requisite number of employees to fall within the statute’s coverage.  In determining hours worked each week by an individual employed by a temporary help firm, the employer is required to aggregate the number of hours worked by the employee in the most recent four weeks at all placements.

Section 193 of the New York Labor Law (NYLL) prohibits an employer from deducting amounts from an employee’s wages, except for amounts that are both for the benefit of the employee and are approved by the employee in writing.  In July 2012, we wrote about the narrow scope of permissible deductions under Section 193.  Such charges were generally limited to insurance premiums, pension contributions, union dues and similar payments.  As we wrote in our September 14, 2012 blog, New York Governor Signs Legislation Broadening Scope of Permissible Wage Deductions under New York Labor Law,  section 193 of the NYLL was amended to permit additional types of deductions to which an employee could consent.

Permissible charges under the 2012 amendments included (i) purchases at charitable events; (ii) discounted parking and mass transit charges; (iii) gym dues; (iv) employer-provided vending machine, cafeteria and pharmacy purchases; (v) tuition and boarding fees for educational institutions; (vi) some child-care expenses; and (vii) payments for certain types of housing provided by non-profit hospitals.

In addition, the 2012 amendments provided a mechanism through which employers could recover overpayments and loans to employees through wage deductions.  Prior to the 2012 amendments, employers were barred from recovering overpayments and loans through wage deductions completely, even if the employee consented to them.  The 2012 amendments still require employers to implement a policy and procedural mechanism to recover overpayments and loan payments, which comport with Section 193’s requirements.