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What Is Wage Assignment?

Definition and example of wage assignment, how wage assignment works, wage assignment vs. wage garnishment.

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A wage assignment is when creditors can take money directly from an employee’s paycheck to repay a debt.

Key Takeaways

• A wage assignment happens when money is taken from your paycheck by a creditor to repay a debt.
• Unlike a wage garnishment, a wage assignment can take place without a court order, and you have the right to cancel it at any time.
• Creditors can only take a portion of your earnings. The laws in your state will dictate how much of your take-home pay your lender can take.

A wage assignment is a voluntary agreement to let a lender take a portion of your paycheck each month to repay a debt. This process allows lenders to take a portion of your wages without taking you to court first.

Borrowers may agree to allow a lender to use wage assignments, for example, when they take out payday loans . The wage assignment can begin without a court order, although the laws about how much they can take from your paycheck vary by state.

For example, in West Virginia, wage assignments are only valid for one year and must be renewed annually. Creditors can only deduct up to 25% of an employee’s take-home pay, and the remaining 75% is exempt, including for an employee’s final paycheck.

If you agree to a wage assignment, that means you voluntarily agree to have money taken out of your paycheck each month to repay a debt.

State laws govern how soon a wage assignment can take place and how much of your paycheck a lender can take. For example, in Illinois, you must be at least 40 days behind on your loan payments before your lender can start a wage assignment. Under Illinois law, your creditor can only take up to 15% of your paycheck. The wage assignment is valid for up to three years after you signed the agreement.

Your creditor typically will send a Notice of Intent to Assign Wages by certified mail to you and your employer. From there, the creditor will send a demand letter to your employer with the total amount that’s in default.

You have the right to stop a wage assignment at any time, and you aren’t required to provide a reason why. If you don’t want the deduction, you can send your employer and creditor a written notice that you want to stop the wage assignment. You will still owe the money, but your lender must use other methods to collect the funds.

Research the laws in your state to see what percentage of your income your lender can take and for how long the agreement is valid.

Wage assignment and wage garnishment are often used interchangeably, but they aren’t the same thing. The main difference between the two is that wage assignments are voluntary while wage garnishments are involuntary. Here are some key differences:

Once you agree to a wage assignment, your lender can automatically take money from your paycheck. No court order is required first, but since the wage assignment is voluntary, you have the right to cancel it at any point.

Wage garnishments are the results of court orders, no matter whether you agree to them or not. If you want to reverse a wage garnishment, you typically have to go through a legal process to reverse the court judgment.

You can also stop many wage garnishments by filing for bankruptcy. And creditors aren’t usually allowed to garnish income from Social Security, disability, child support , or alimony. Ultimately, the laws in your state will dictate how much of your income you’re able to keep under a wage garnishment.

Creditors can’t garnish all of the money in your paycheck. Federal law limits the amount that can be garnished to 25% of the debtor’s disposable income. State laws may further limit how much of your income lenders can seize.

Illinois Legal Aid Online. “ Understanding Wage Assignment .” Accessed Feb. 8, 2022.

West Virginia Division of Labor. “ Wage Assignments / Authorized Payroll Deductions .” Accessed Feb. 8, 2022.

U.S. Department of Labor. “ Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title III (CCPA) .” Accessed Feb. 8, 2022.

Sacramento County Public Law Library. “ Exemptions from Enforcement of Judgments in California .” Accessed Feb. 8, 2022.

District Court of Maryland. “ Wage Garnishment .” Accessed Feb. 8, 2022.

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Wage Garnishment & Assignment: 4 must knows for employers

By Julie Farraj

Feb. 15, 2017

Proper management of wage garnishment can be especially crucial to growing businesses because as their hiring increases, they may also be inadvertently increasing their garnishment liability. That’s why it’s important for an employer to remember four things can help appropriately and accurately process wage garnishments while remaining compliant.

1. All garnishments are not the same.

Here’s a basic wage withholding definition: When an employee fails to repay a debt, a wage withholding court order can be issued against the employee’s earnings to satisfy that debt. This court order — also called a wage garnishment — requires the employer to withhold a portion of the employee’s wages and forward them to a third party. Wage garnishment orders also can be issued by government agencies such as the IRS, state tax agencies and the U.S. Department of Education.

Simple, right? A business receives an order about one of its employees and refers it to its payroll department to process by withholding the appropriate wages and forwarding it to the proper recipient.

There are six common types of wage garnishment. They are:

Child support garnishment comprises by far the highest volume of orders employers process, and, while some of the laws are very standardized, the law can vary by state.

Creditor garnishments are debts that occur when a person is delinquent on consumer payments (e.g. credit card debt). The creditor may take the debtor to court and seek a wage withholding order for the outstanding debt.

Bankruptcy orders . Based on research from the American Bankruptcy Institute , 97 percent of all bankruptcies are personal filings rather than business filings.

Student loans may be collected by the U.S. Department of Education, which may contract with collection agencies to enforce and collect the defaulted loans.

Tax levy garnishments can be issued at the federal, state or local level. Each state differs in its requirements and those laws may differ from federal levies.

Wage assignment occurs when an employee voluntarily agrees to have money withheld from his or her wages. Wage assignments are governed by state law and do not involve a court order. Since they are voluntary and the employee specifies the amount to withhold, they do not fall under the requirements of the Federal Consumer Credit Protection Act.

It’s important that employers keep in mind the type of debt owed, the party collecting it, and the laws applicable to that debt. Knowing which laws, rules, and regulations apply and keeping current on them when processing wage garnishments can be challenging for employers, and, if done incorrectly, may expose employers to various liabilities and penalties.

In addition, the six types of wage garnishments noted above are the most common wage garnishments; employers may receive other less common types of wage garnishments. It’s the employer’s responsibility to comply with and make sure all orders are processed in a timely manner and correctly whether or not they are familiar.

2. Wage garnishment can affect employee productivity and morale.

Most employers recognize that wage garnishment has a direct impact on employees. However, this impact can extend beyond their paychecks. Processing garnishments is not as straightforward as simply withholding wages from an employee’s paycheck and sending a payment. The process is far from simple and can be complicated by myriad emotions.

Employees often find it humiliating because the courts have intervened and employers have become involved in their private struggles.

Employees in this position may feel that they’re now working for the institutions to which they’re indebted rather than for themselves and their futures. Stress and anxiety are often natural extensions of the garnishment process.

An affected employee’s anxiety could show itself through decreased productivity or a lack of motivation. Employers can help affected employees and potentially decrease future garnishments by providing financial wellness training and counseling, as well as tax education, to help employees manage debt.

3. Wage garnishment can affect an employer’s finances and business efficiency.

Employees aren’t the only ones affected by wage garnishment. Employers expose themselves to financial and legal risk when they incorrectly garnish an employee’s wages, fail to file in a timely way, file a defective response, fail to follow specific requirements when sending payments, or make other missteps with a garnishment. Mishandling a garnishment can lead to a judgment against the employer for the entire amount of the employee’s debt, a lawsuit from the creditor or the employee, or other costs or penalties that the employer didn’t anticipate or budget for.

In the instance of garnishments for child support, employers could potentially feel the impact of laws designed to restrict travel. For instance, the Social Security Act was amended in 1997 with a sub-section that established the denial, revocation, or restriction of U.S. passports if the non-custodial parent has child support arrears of $2,500 or more. Additionally, some state agencies have the authority to deny or revoke drivers’ and professional licenses for past-due child support obligations .

If your business requires employees to travel internationally or employs drivers, these laws could impact an employee’s ability to do his or her job effectively and, by extension, impact the efficiency of your business.

Another current area of focus that could impact employers is in the creditor garnishment arena. Currently, the American Payroll Association is working with the Uniform Law Commission to establish a standardized processing for creditor garnishments through the Uniform Wage Garnishment Act, which proposes to standardize the wage-garnishment process for employers, employees and creditors. Currently, state laws differ significantly in their requirements regarding wage garnishment, from the beginning to the end of the garnishment, and are often outdated. This means businesses that operate in multiple states must identify and abide by these different legal requirements, which can potentially lead to processing errors, confusion, inefficiency and noncompliance.

Companies can help manage these challenges if they become familiar with garnishment laws and guidance from agencies such as the Federal Office of Child Support Enforcement, develop reliable and timely procedures for garnishment processing and ensure that policies are administered fairly for all employees facing a wage garnishment.

It may be useful to develop tools, resources and strong contacts with agencies, courts and garnishors. Staying close to these agencies may help your business remain aware of major changes to wage garnishment laws.

Consider participating in state and federally initiated pilot projects. These programs are valuable opportunities to positively build relationships, influence initiatives and provide needed feedback. Make sure you have established a way to monitor legislation that could affect garnishment processing.

Other steps an employer can take include participating with committees, attending conferences regarding wage withholding, and leveraging other contacts you’ve developed with the agencies, those imposing wage garnishments, or other employers.

4. Paper processing is the not the only option.

A study by the ADP Research Institute revealed that 7.2 percent of employees had wages garnished in 2013. Keeping pace with the proper and timely processing of wage garnishments is challenging for many businesses.

As wage garnishment volumes and laws intensify, garnishment processors have the option to use electronic funds transfer, or EFT, to save time, increase efficiency, streamline processes and potentially reduce costs.

Currently, virtually every child support state agency has the ability to accept child support payments via EFT, and some have even mandated employers to send payments electronically. Some tax levy agencies, trustees and student loan agencies also are implementing electronic payment capabilities. In addition to business efficiencies, EFT enables greater security of personally identifiable information, such as Social Security numbers.

Minnesota has passed legislation requiring employers to electronically file their response to a state tax garnishment summons with the state tax agency, and Wayne County Court in Michigan is piloting the option of electronic responses.

Electronic income withholding orders are already very popular. These enable states to electronically distribute income withholding orders and employers to electronically accept or reject them.

Clearly, wage garnishment can have a profound effect on the employee who is being garnished, as well as the employer who must implement the garnishment. It’s important for businesses of all sizes to understand the different types of wage garnishment, familiarize themselves with the laws governing them, and learn ways to accurately and efficiently process them.

Using best practices can help streamline an employer’s responsibilities and ease the potential anxiety an employee may feel with this sometimes-necessary workforce issue.

Julie Farraj is vice president of Garnishment Services for ADP Added Value Services. Comment below or email [email protected].

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Wage Assignments and Garnishments: What Finance Leaders Need to Know

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Wage assignments and garnishments practices: Here are three things finance leaders must internally audit.

Wage assignments and wage garnishments are not the same. Each reflects a different process subject to different applicable laws. While there is always potential for a DOL Wage and Hour Division audit, financial leaders should internally audit their own processes to ensure compliance and efficiency while minimizing stress and anxiety for the employer and the employee. Here are three things to consider when conducting those audits.

1. Compliance

Wage assignments and wage garnishments differ in many ways. In fact, a wage assignment is not a garnishment. A wage assignment is a voluntary agreement between the employee and creditor where an amount is withheld from the employee's paycheck to satisfy a debt owed to a third-party recipient, whereas under a wage garnishment, the amount withheld from the employee's check is typically obtained through a court order initiated by the creditor.

Adding to the compliance challenge, there are several different types of wage garnishments, often with differing rules for each. For example, child support, bankruptcy and student loans are all types of wage garnishments. Wage garnishments for child support obligations are substantially governed by state law, which varies state to state, whereas garnishments for a bankruptcy plan are governed by federal law and garnishments for student loan debts are governed by either state or federal law, depending on the financing.

2. Efficiency

Businesses must be able to confirm when wage garnishments are initiated, when they cease and when more than one applies and in what order. This is what can make these withholdings complex — and messy. By having trackable systems in place, efficiency can be achievable.

3. Minimizing Stress and Anxiety

According to Workforce , wage garnishments can affect employee morale. Having wages withheld from paychecks may be a negative employee experience, especially when the employer has to get involved. For employers that are preparing audit-ready workplaces, these organizations face their own stress by potentially facing liability for noncompliance with respect to wage garnishment withholdings.

Having prudent processes in place may not only help with compliance and efficiency for the employer, but can also help alleviate stress for both the employee and the employer.

Learn about the ADP SmartCompliance® Wage Garnishment Module .

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Wage Assignment Overview

Usually, a creditor has to go to court to take part of your wages. This is called wage garnishment .

However, if you signed a form agreeing to a wage assignment, a creditor can take your wages without first going to court. You may agree to a wage assignment when you sign a loan contract. This allows your creditor to have money deducted from your wages if you don't pay.

Starting a Wage Assignment

You must be at least 40 days behind on your loan before the creditor can have your employer start taking money out of your paycheck.

First, the creditor must mail you and your employer a Notice of Intent to Assign Wages 20 days before they can make the demand. The notice has to be sent to you by certified or registered mail. You should receive advance warning that money will be deducted from your wages.

The notice must follow a specific form and must include the following information:

• be sent to you and your employer;
• be sent by registered or certified mail;
• inform you the creditor will demand part of your wages from your employer in 20 days;
• include a copy of the wage assignment; 
• tell you how much you owe; 
• include your options to respond to the notice; and
• include a revocation notice form.

The creditor then must send a demand letter to your employer. The demand must contain the correct amount in default and include a copy of the assignment. If the notice or demand does not follow the requirements of the law, they have no legal effect.

If you do not revoke the wage assignment, then 20 days later (once the loan is 40 days past due), your employer will start paying a portion of your paycheck to the creditor to pay off your debt.

Day One: Loan is past due

Day 20: Creditor sends notice

Day 40: Wage assignment begins.

Amount of a Wage Assignment

The creditor may take from your paycheck whichever amount is less between the following two options:

• 15% of your total wages, salary, commission, and bonuses for any workweek; or
• The amount your take-home pay (after taxes and other withholdings) for a week is over $630 (which is 45 times the 2024 state minimum hourly wage ).

That means that you can only have a wage assignment if you take home over $630 per week.

Stopping a Wage Assignment

You can stop a wage assignment at any time for any reason. If you don't want the deduction to happen, write a letter to your employer and creditor stating you are canceling the wage assignment. Remember, you will still owe the money. The creditor can use other methods to collect it. That probably means a court case, which may end with an involuntary wage garnishment.

Length of a Wage Assignment

A wage assignment is good for 3 years from the date you signed the wage assignment. But, if you changed jobs after you signed the wage assignment, the wage assignment is only good for 2 years from the date you signed the wage assignment.   If a creditor tries to collect money from your paycheck after the time period expires, you should talk to a lawyer. You might be able to sue the creditor in court.

Note : Child support and student loans can also result in garnishments without a court case.

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• How to Obtain a Garnishment Order
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Wage Assignments in Consumer and Other Contracts

Most of the time an employee knows when his wages are about to be garnished: He is sued, the court enters a judgment against him for the amount owed, and thereafter a wage garnishment order ensues. The employee has plenty of time to plan for it, forewarn his employer, and make the process as palatable as possible, should a repayment arrangement not be possible.

Not so for many of the so-called “voluntary” wage assignments that are being included in consumer credit and loan agreements with greater regularity than ever before. These provisions allow the creditor to skip the formality, delay, and expense of the legal process altogether, and go straight to the employer with a demand for garnishment.

An employee typically does not learn about this kind of garnishment until after the garnishment has taken place and he notices his pay check is short.

Difference between Wage Assignments and Wage Garnishment Orders

Technically speaking, a wage assignment is a provision in a private agreement — often a consumer credit agreement like the ones used in buying a refrigerator.

The “wage assignment” provision assigns the borrower’s future wages to the creditor in the event of default by non-payment. If a default occurs, the creditor in effect forecloses on the security (the wages) by sending a garnishment demand to the employer. Usually, the letter is written by the creditor’s attorney or billing department.

To enforce a wage assignment, no court process is involved. That’s the nature of the provision. It says no court process need be involved and authorizes the creditor to skip the time and expense of court and go straight to the employer. It also, of necessity, eliminates the debtor’s opportunity to challenge the debt in court or seek limitations on the garnishment.

Most garnishments are based on a judgment or court order and constitute official orders of the court. The request for garnishment is made to the court and the court grants the request by issuing a garnishment order. This is the case for most wage garnishments for child support.

Types of Voluntary Wage Assignments

Voluntary wage assignments, often simply called “wage assignments,” are those that the indebted employee enters into by agreement. He may agree to it by signing a consumer credit or loan agreement, or he may agree to repay a debt by entering into a repayment agreement with a wage assignment provision.

The typical wage assignment provision allows the employer to take the employee’s future wages as security for the debt involved. In the event of default or nonpayment, it authorizes the creditor to go straight to the employer with a demand for wage garnishment, no court filing or judgment required.

Considering these wage assignments as “voluntarily” is a stretch. Most borrowers don’t read the fine print in consumer contracts and loan papers, have no bargaining strength to oppose these provisions even if they want to, and don’t learn about the wage assignment until it is too late to do anything about it.

Nonetheless, unlike a court order, they do have a voluntary component in that the borrower chose to obtain the credit and afterwards to use it to buy goods or services or receive cash.

Federal Garnishment Law Does Not Protect Wage Assignments

In 1970, Congress passed Title III of the Consumer Credit Protection Act. Under that Act, the federal government took control over wage garnishment proceedings for the first time.

Generally speaking, this law limits the extent to which earnings can be garnished to 25% of “disposable earnings” or to amounts above 30 times minimum wage, whichever is less. It also prohibits the employer from terminating an employee for any wage garnishment based on a single debt.

The definition of “disposable earnings” is key to the determination of the maximum allowed garnishment. “Disposable earnings” means earnings after reduction for legally-required deductions like federal, state and local taxes, the employee’s share of State Unemployment Insurance and Social Security, and Worker’s Compensation.

Importantly, the permitted deductions DO NOT include sums withheld as part of a voluntary wage assignment; as such deductions are not legally required. What this means is that wage garnishment protections do not take into account the effect of voluntary wage assignments. Also, they do not apply to real estate purchases (which have specific contracts).

Furthermore, because wage assignments are not technically considered garnishment under federal law, an employer can lawfully terminate an employee for a single garnishment based on a voluntary wage assignment. Put another way, the anti-termination protections of federal law do not apply to wage assignments.

State Law Limitations on Wage Assignments

Many states have passed laws making wage assignments invalid, due to their intrusive and potentially devastating effect on borrowers. Some states bar any form of wage assignment, while others limit wage assignments to only child or spousal support.

Still others require the written consent of both spouses, or the execution of an entirely separate document addressing the assignment (so as to prohibit it from being buried in the fine print). In all cases, the employer need not comply with an illegal wage assignment, and often would be legally liable for doing so.

Needless to say, the field of voluntary wage assignments is a complicated one. Consulting with an experienced labor and employment, debtor-creditor, and/or consumer counsel is an important part of properly navigating this area of employment.

Citations/references

Federal statute: title iii, consumer credit protection act (ccpa), 15 usc, §§1671 et seq., code of federal regulations: 29 cfr part 870, u.s. wage and hour division: fact sheet #30 – the federal wage garnishment law, consumer credit protection act’s title iii (ccpa), field operations handbook – 02/09/2001, rev. 644, chapter 16, title iii – consumer credit protection act (wage garnishment), summary of state laws on garnishment: http://www.nolo.com/legal-encyclopedia/free-books/employee-rights-book/chapter2-9.html.

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Wage assignment and employers’ responsibilities

Tough economic times raise some tricky HR issues—for example, when an employee’s financial straits begin to affect his employer.

Must we honor a payday loan wage assignment?

Q. An employee borrowed money from a payday loan service at a very high interest rate that I feel is unfair. The payday loan service sent me a “wage assignment” notice and told me that our company must withhold money from his paychecks.  What is a wage assignment, and does our company actually have to honor it? A. A wage assignment is a document that allows a creditor to attach part of the employee’s wages if the employee fails to pay a specific debt. The creditor does not have to obtain a judgment in a court proceeding before requesting payment. Under the Illinois Wage Assignment Act (740 ILCS 170), private employers are obligated to honor a creditor’s properly served demand for a valid wage assignment, unless an employee presents a timely, valid , written defense to the wage assignment.

What constitutes a valid assignment?

Q. How can I tell if a wage assignment is valid? How long is it valid? A. A valid wage assignment document must have the words “Wage Assignment” printed or written in boldface letters of not less than ¼ inch in height at the head of the wage assignment and one inch above or below the line where the employee signs the assignment. The employee must have signed the document in person, and the document must show the date of execution, the employee’s Social Security number, the name of the employer at the time of execution, the amount of money loaned or the price of the articles sold or other consideration given, the rate of interest or time-price differential to be paid, if any, and the date on which such payments are due. A wage assignment is valid for no more than three years after the employee signs it and the employer’s name appears on it. If the employee changes jobs, the wage assignment is valid for two years, even though the new employer’s name does not appear on the assignment.

Handling wage assignments

Q. How does the wage assignment process start? A. Assuming that the wage assignment document complies with the formal requirements, the creditor must serve “demand to withhold” on the employer. The demand is valid only if:

The employee has defaulted on the debt secured by the assignment for more than 40 days, and the default has continued to the date of the demand.

The demand contains a correct statement of the amount the employee is in default, and the creditor provides an original or a photocopy of the assignment to the employer.

The creditor has served a “notice of intention to make the demand” upon the employee, with a copy to the employer, by registered or certified mail not less than 20 days before serving the demand.

Putting on the brakes

Q. Can an employee stop the wage assignment process? A. The employee does have a right to contest the demand. If an employee has a legal defense to the wage assignment, the employee may—within 20 days after receiving a notice of demand or within five days after the employer is served with the demand—notify the employer, in writing, of any defense to the wage assignment and send a copy of the written defense to the creditor by registered or certified mail.   As a result, the employee’s wages are not subject to a demand served by the creditor unless the employer receives a copy of a subsequent written agreement between the creditor and the employee authorizing such payments. Similarly, if the creditor receives a copy of the defense prior to serving its demand upon the employer, the creditor may not serve the demand upon the employer.  Whether the employee’s defense is legally valid is not an issue the employer must resolve. Instead, the employee and the creditor may attempt to reach another agreement or the creditor may simply bring a separate lawsuit against the employee to collect an outstanding debt. 

Calculating the wage assignment payment

Q. How much must the employer withhold—and when? A. The employer must begin payment to the creditor no sooner than five business days after service of such a demand.  The employer must withhold the lesser of:

15% of weekly gross wages

The amount by which the disposable earnings for a week (pay remaining after federal and state taxes, Social Security deductions and any other amounts required by law to be withheld, including required retirement contributions) exceed 45 times the federal minimum wage, unless a notice of defense is received within that five-day period.

The employer shall be paid a fee of $12 for each wage assignment. That $12 is credited against the debt.

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How Can I Stop a “Voluntary Wage Assignment”?

Home » Blog » How Can I Stop a “Voluntary Wage Assignment”?

Posted in Creditor Actions

By J. Douglas Hoyes, CA, LIT

Reading time: 3 minutes

Some lenders require their borrowers to sign a form called a “Voluntary Wage Assignment” which allows the borrower’s wages to be garnisheed if they do not repay the loan as agreed.  Payday loan companies and Credit Unions commonly ask borrowers to sign these types of forms. However not all wage assignment agreements are enforceable by law.

A voluntary wage assignment is an agreement between a debtor and a creditor which allows an amount to be deducted from the borrower’s wages to repay a debt. When a loan is in default, a signed wage assignment form is sent to the borrower’s employer requesting the company begin withholding an agreed amount from their wages and remit this amount to the creditor.

I am often asked if it is possible to stop a voluntary wage assignment without declaring personal bankruptcy. Here are the facts:

• In order to garnishee your wages in Ontario, a creditor must take you to court and sue you, and then obtain a Garnishment Order from the court.
• The only exceptions are a Credit Union to whom you have given an assignment of wages, or Canada Revenue Agency.
• In Ontario, Section 7 of the Ontario Wages Act specifically prohibits the assignment of wages to secure payment of a debt except in the case of a Credit Union.
• If any other creditor has not taken you to court, and has not obtained a Garnishment Order, the only way that the voluntary wage assignment can be enforced is if you consent to the employer garnisheeing your wages.

What that means is that only a Credit Union is legally able to enforce a wage assignment agreement in Ontario.  You can ‘un’-volunteer yourself from a voluntary wage assignment with a payday loan company or any creditor other than a Credit Union .

While generally, you can ask your employer to stop a voluntary wage assignment, the wage assignment may be a symptom of a greater financial problem and if you have received a legal garnishment order, there are options to stop a wage garnishment .

Can payday loan companies garnish your wages?

Payday loan companies often ask you to sign a voluntary wage assignment as part of the loan process. However these voluntary assignments are unenforceable.  Even though you have signed the voluntary wage assignment form, the form is not legally binding in Ontario; you can instruct your employer to not enforce it, and your employer is required to do as you ask.

Payday loan companies can, however, still go to court if they wish and obtain a legal garnishment order. If they, or any creditor, has obtained a court order granting them permission to garnish your wages, then your employer is required to comply.

If you are having problems meeting your financial obligations, please contact us to arrange a no charge consultation with one of our professionals to talk about your debt relief options.

Similar Posts:

• Wage Garnishing: Know Your Rights
• Stopping A Wage Garnishment with a Consumer Proposal
• How do I Stop a Wage Garnishment by Making a Deal with My Creditor?
• How to Stop a CRA Wage Garnishment
• What to Do When Creditors Threaten Legal Action

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Illinois Garnishments News: Wage Assignments No Longer Expire in 84 Days

Recently, illinois revised its wage assignment law. this development is important for multistate employers because illinois is the only state with a statute that clearly and unequivocally provides that employers must honor contracts employees make with third parties to assign wages..

Recently, Illinois revised its wage assignment law. This development is important for multistate employers because Illinois is the only state with a statute that clearly and unequivocally provides that employers must honor contracts employees make with third parties to assign wages. Under the Illinois Wage Assignment Act, 740 ILCS §§170/.01 et seq ., there are detailed steps that a creditor must take with an employee for an assignment to be legal and then again with the employer for the assignment to be enforceable against the employer. A highlight of three key changes to the law follows:

• The revised statute eliminated the provision providing that the duration of deductions was only an 84-day period. After this period, the creditor had to restart the “Notice and Demand” process from the beginning in order for the employer to restart wage deductions. Now, under the revised statute, a valid wage assignment lasts until paid, but no longer than three years if the current employer is named on the assignment or two years if the current employer is not the one named on the assignment.
• The revised statute added recognition of Federal Trade Commission (FTC) regulations that require wage assignments derived from credit transactions regulated by the FTC to be revocable at the will of the debtor. Since state laws cannot contradict federal law, this change is academic, but it does provide clarity to all involved parties.
• The revised statute changed some of the statutory verbiage on the required Notice and Demand, including adding an entirely new document called “Understanding Your Choices Under the Illinois Wage Assignment Act.”

Martin C. Brook , a shareholder in the Detroit (Metro) office of Ogletree Deakins, is the author of OD Comply: Garnishments , a comprehensive subscription-based product compiling state law garnishment requirements in concise, user-friendly formats with links to state garnishment forms. OD Comply: Garnishments is updated and provided to  OD Comply subscribers as the law changes.

For further information on garnishment issues and best practices, join Martin for “Garnishments and Other Wage Attachments: Answering, Administering, and Troubleshooting,” a full-day seminar that will take place on April 11, 2017, in Phoenix, Arizona. Register here .

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2005 Illinois Code - Chapter 740 Civil Liabilities 740 ILCS 170/      Illinois Wage Assignment Act.

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Sen. Cory Booker questions US prison labor policies, calls for change

Senate Judiciary Subcommittee on Criminal Justice and Counterterrorism Chair Sen. Cory Booker, D-N.J., speaks during a hearing on Capitol Hill in Washington, Tuesday, May 21, 2024, to examine forced labor in prisons. (AP Photo/Susan Walsh)

Senate Judiciary Subcommittee on Criminal Justice and Counterterrorism ranking member Sen. Tom Cotton, R-Ark., left, sitting next to Chair Sen. Cory Booker, D-N.J., right, speaks during a hearing on Capitol Hill in Washington, Tuesday, May 21, 2024, to examine forced labor in prisons. (AP Photo/Susan Walsh)

Andrea Armstrong, an incarceration law scholar from the Loyola University New Orleans law school testifies during a Senate Judiciary Subcommittee on Criminal Justice and Counterterrorism hearing on Capitol Hill in Washington, Tuesday, May 21, 2024, to examine forced labor in prisons. (AP Photo/Susan Walsh)

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Prisoners should be learning professional skills that help prepare them for their release instead of being forced to work, sometimes picking crops in triple-digit heat for pennies an hour or nothing at all, Sen. Cory Booker said at a Senate judiciary subcommittee hearing on prison labor Tuesday.

America locks up more people than almost any other country in the world — nearly 2 million — and they are disproportionately people of color. Those who refuse to work can be punished, including being thrown into solitary confinement, Booker noted. And those injured or killed often do not have access to most basic rights and protections guaranteed to other American workers.

“Our prisons should reflect the best of who we are, they should reflect our values,” the New Jersey Democrat said. “And they should, in my strong opinion, be places that are not just for punishment, but for rehabilitation and for creating roads of redemption.”

While most incarcerated workers today help maintain correctional facilities, others are leased out to private companies or take part in work-release programs. Companies such as McDonald’s, KFC, Walmart, Cargill and Tyson Foods have benefited from the multibillion-dollar industry, The Associated Press found as part of an ongoing two-year investigation into how prison labor is quietly entering the supply chains of some of America’s most recognized companies and brands.

Booker, chair of the Senate’s subcommittee on criminal justice and counterterrorism, was speaking during a hearing aimed at looking at ways to rethink prison labor, from making jobs voluntary and boosting wages to protecting workers against injuries and abuse.

Republican Sen. Tom Cotton of Arkansas pushed back, saying prisoners are dangerous people housed in dangerous facilities where “idle hands are the devil’s workshop.” He added that prison labor is a way for inmates to give something back to the society they wronged.

“And if that means scrubbing toilets, mopping floors or picking up the garbage,” he said, “then so be it.”

American prisoners were being put to work in the early 1800s, but the practice ramped up after the Civil War with the passage of the 13th Amendment to the U.S. Constitution, which contained a loophole . It ended slavery for everyone except those convicted of a crime. For decades after emancipation, Black men were rounded up — often for petty crimes — and put to work under brutal conditions during the convict leasing era. It lined the coffers of industrial giants such as U.S. Steel and Tennessee Coal, Iron and Railroad Company , while helping to rebuild the South’s broken economy.

Andrea Armstrong, a law professor at Loyola University New Orleans, said incarcerated workers are sometimes given dangerous assignments with little or no training, leading in some cases to painful and lifelong, debilitating injuries, and even death.

That, she said, was never intended to be part of their sentence. She listed a number of prisoners who have died preventable deaths while working behind bars, while also highlighting work by the AP .

“Refusing to work in dangerous conditions could even lead to new criminal charges and new sentences in some states,” she said. “And we, the general public, have no idea because this forced labor occurs in spaces that lack oversight, transparency and accountability.”

Contact AP’s global investigative team at [email protected] or https://www.ap.org/tips/