Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Effective September 21, 2009, the New Jersey Department of Labor and Workforce Development, Division of Wage and Hour Compliance, adopted a new rule allowing employers to make payroll deductions for health club membership fees or for child care services if payment is authorized in writing by an employee or pursuant to a collective bargaining agreement and approved by the employer. In promulgating this new rule, the Department of Labor amended New Jersey Administrative Code § 12:55-2.1, which sets forth the very limited circumstances in which an employer may make a payroll deduction.
New Jersey also permits employers to make payroll deductions that are:
- authorized by state or federal law;
- authorized in writing by the employee or pursuant to a collective bargaining agreement as contributions to welfare, insurance, hospitalization, medical, pension, retirement, and profit-sharing plans, etc., on behalf of the employee, his or her spouse, or both;
- authorized as contributions either in writing by the employee or under collective bargaining agreement for payment into company-operated thrift plans, or security options, or security purchase plans to buy securities of the employing corporation or other corporations, provided the securities are listed on the stock exchange or are marketable over the counter;
- approved by the employee as payment into the employee’s personal savings account, credit union, saving fund society, savings and loan or building and loan association, and payments to banks for Christmas, vacation, or other savings funds, provided all deductions are approved by the employer;
- owed as payments for company products or loans, payments for safety equipment, purchase of U.S. government bonds, and/or payments to correct payroll errors, provided all deductions are approved by the employer;
- authorized as contributions to recognized charities, provided deductions are approved by the employer;
- authorized by the employee or collective bargaining agent as payments for rental, laundering, or dry cleaning of work clothing or uniforms, provided all deductions are approved by the employer;
- permitted as union dues, initiation fees, or other charges;
- authorized in writing by the employee, pursuant to collective bargaining agreement to a political committee, continuing political committee, or both, established by the employee’s labor union for the purpose of making contributions to aid or promote nomination, election, or defeat of any candidate for public office of a state or of a county, municipality, or school district, or passage or defeat of any public question;
- authorized in writing by the employee to any political committee or continuing political committee, for purposes of making contributions to aid or promote the nomination, election, or defeat of any candidate for public office of a state or of a county, municipality, or school district, or passage or defeat of any public question (administrative expenses in making a payroll deduction shall be borne by the committee, at the option of the employer);
- authorized by the employee for employer-sponsored programs for purchase of insurance or annuities on a group or individual basis, if otherwise permitted by law; or
- authorized as a deduction by Commissioner of Labor, by regulation, if approved by the employer.
This entry was written by Michael Grosso.