In recent years, the world of employment litigation has seen a rise in both the volume and the high stakes of wage-based claims filed by employees against their employers. One such hot-button issue in New York involves employee challenges to employers’ alleged deductions of certain wages from their paychecks. New York Labor Law §193 protects employees from such unlawful wage deductions, and courts are now being called upon to decide whether there has been an unlawful “deduction” from wages sufficient to bring a claim under §193. One particularly tricky issue arises when the employer allegedly fails to make any payment at all, and the employee attempts to bring a claim against the employer pursuant to §193. Logically, a “deduction” from the amount of wages due to an employee connotes a reduced payment, in contrast to an entire failure to pay anything.
In 2012, the New York Court of Appeals issued a controversial opinion in Ryan v. Kellogg Partners Institutional Services.1 The court in Ryan, in dicta, made a passing comment that a failure to pay wages may constitute a “deduction” under §193. The question of whether a deduction occurred, however, was never raised, briefed or argued before the Court of Appeals, thereby strongly calling into question what analysis, if any, the court devoted to this critical point. In fact, following Ryan, the majority of courts that engaged in a substantive analysis of this issue have resoundingly concluded that an employer’s failure to pay any wages at all does not qualify as a “deduction” under §193.
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