State Department of Labor Issues Draft Rules Prohibiting Wage Deductions for PAC Contributions

The state Department of Labor recently issued draft regulations (12 NYCRR 195) regarding permissible employee wage deductions under Labor Law § 193, which was amended by Chapter 451 of 2012. (Read the bill and memo.)

The draft rules specifically prohibit “contributions to political action committees, campaigns and similar payments” (§ 195-4.5 Prohibited Deductions).

This blanket ban on employee wage deductions for political action committee contributions could become an issue in New York’s debate over reforming the state’s campaign finance laws.

The Business Council of New York State (BCNYS) has taken the position that “[s]ome campaign finance reforms are self-serving, including proposals that tilt the law to the advantage of organized labor and the disadvantage of business or other interests,” arguing that any changes must treat business interests and labor interests equally.

In its recent testimony at a Senate Elections Committee hearing, BCNYS specifically cited the wage deduction prohibition as one example of how the state’s campaign finance laws “tilt the law to the advantage of organized labor and the disadvantage of business or other interests”:

“…by statute, union dues – from which most of union PAC funds are derived – can be withheld from workers’ paychecks, but voluntary paycheck withholdings to support employee PACs are categorically prohibited (a prohibition we have not found in most other states, and which do not apply under federal election law.)”

The public comment period on DOL’s draft rules runs through July 6, 2013.