KEEPING YOU INFORMED…

With the proliferation of “red-light-cameras” at traffic intersections, and the emergence of “school-zone-speed-cameras,” an emerging issue is who is responsible for paying the fines that employees receive from these cameras while operating employer-issued vehicles. This memorandum summarizes when, if at all, an employer can require an employee to pay the fines.

New York Labor Law Section 193 permits private sector employers to make deductions from employee wages that fall within the following four categories: (1) deductions authorized by a law, rule or governmental agency regulation (e.g., payments for taxes or wage garnishments); (2) deductions authorized by the employee and for the benefit of the employee (e.g., health, welfare and pension benefits, child care, and dues or assessments to a labor organization); (3) deductions for the recovery of overpayments; and (4) deductions for the repayment of wage advances. Private sector employers are not permitted to make deductions from employee wages or require employees to make payments by separate transactions for, among other things, the repayment of employer losses like spoilage, breakage, cash shortages and fines or penalties incurred by the employer.

A ticket issued by a camera is payable by the owner of the vehicle (the employer) and not the driver (the employee). Thus, the ticket is a penalty incurred by the employer. The employee cannot, therefore, be required to pay the penalty by separate transaction or have it deducted from wages. The employer could, however, discipline the employee for the conduct that led to the issuance of the ticket, or commence legal action against the employee for indemnification pursuant to the New York State Vehicle & Traffic Law.[1] Although an employee could voluntarily elect to reimburse the employer, a court may question the voluntariness of the payment since the employee was potentially the subject of discipline and litigation.

Public sector employers have more flexibility because they are not covered by Labor Law Section 193. This does not mean that public employers have complete discretion to make wage deductions from their employees’ wages. The Court of Appeals has ruled that a public sector employer may not unilaterally make deductions from an employee unless the money owed has been reduced to an “independently established debt;” i.e., a debt established by “concession, agreement, litigation or the like.” In most cases, this will require the employee to consent to the wage deduction. Where consent is not given, but the debt has been independently established; i.e., established through litigation, a public sector employer must, at a minimum, still provide notice to the employee before making a unilateral deduction. It must also limit the amount withheld per paycheck. As a best practice, public sector employers should comply with the private sector legal limits for permissible withholdings; i.e., a withholding should not exceed 12.5% of the gross wages earned in the pay period or reduce the wages so that the employee earns less than the State minimum wage.

It is unclear whether a camera-issued ticket would constitute an “independently established debt.” We, therefore, recommend that a public sector employer only make withholdings for these tickets with the consent of employees. Without consent, an employer would have to commence a legal action for indemnification in order to “independently establish” the debt. Employees may also be disciplined for their behavior.

If you have any questions regarding wage deductions or handling employees who have received “red-light-camera” or “school-zone-speed-camera” tickets in your vehicles, please contact us.

THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.

© Lamb & Barnosky, LLP 2014

[1] Each of the sections of the Vehicle & Traffic Law that authorizes the use of “red-light-cameras” and “school-zone-speed-cameras” provide that if the owner of a vehicle receives a camera ticket but was not the operator of the vehicle, the owner may commence an action for indemnification against the operator; i.e., an action for recovery of the money owed.