Uniform Wage Garnishment Act Agenda What is it? Why do we need it? Major provisions Enactment 1
Who is the ULC? National Conference of Commissioners for Uniform State Laws Uniform Interstate Family Support Act Uniform Electronic Transactions Act Uniform Commercial Code Hundreds more Highlights 4 2
Limited role for courts Answer directly to creditor Reduce court costs ERs won t need attorneys to handle garnishments Parties retain right to petition court Employee defined Workers treated as EEs for FIT Former EEs owed earnings Independent contractors receiving periodic payments from employer 3
Principal place of employment Garnishment served in state of EE s principal place of employment EE can attend court proceeding without traveling out of state Exemption if ER is not subject to jurisdiction in the state where EE works Serving the order Served on ER s registered agent Order must include Debtor s name and last known address Amount owed Something to identify the debt Name, address of creditor s agent receiving payments 4
Serving the order Separately, creditor must provide debtor s Date of birth Full Social Security number Or else state that date or number is not known Provided only to the ER Not filed with the court Does not become public document Notice to employee Plain language notice explains Why am I getting this notice? How much do I owe? How will the amount I owe be paid? What options do I have? What if I don t do anything? 5
Administrative fee #1 Single up-front fee Paid at time of service APA suggests $75 Likely charged back to EE Administrative fee #2 Two-fee structure Up-front fee to be paid at time of service APA suggests $20 Per-payment fee deducted from paycheck APA suggests $3.50 6
Administrative fees WA OR NV CA AK MT ID WY UT CO AZ NM ND SD NE KS OK TX MN WI IA IL MO AR MS LA NY MI PA OH IN WV VA KY NC TN SC GA AL FL ME VT NH MA RI CT NJ DE MD DC HI Per payment fee (11) No fee allowed for creditor garnishment (25) One-time fee (13) Up-front and per payment fee (2) Garnishee response ER has 21 days to answer Reasons for refusal: EE doesn t work for ER Garnishment not served in EE s work state Order is incomplete No administrative fee 7
Garnishee response time WA OR NV CA AK MT ID WY UT CO AZ NM ND SD NE KS OK TX MN WI IA IL MO AR MS LA NY MI PA OH IN WV VA KY NC TN SC GA AL FL ME VT NH MA RI CT NJ DE MD DC HI immediately Within 1 week (2-7 days) Within 2 weeks Within 3 weeks (15-21 days) 30 days or more Varies, per pay period, or N/A Garnishee response If ER refuses order, creditor has 21 days to: Seek dismissal of the garnishment action or Request hearing to determine whether ER must proceed 8
Garnishee response If garnishment is OK, ER must: Tell creditor s agent that debtor works for ER Include pay frequency, date of next payday Include name, contact info for ER contact Notify the EE of garnishment Withholding begins 1st payday at least 30 days after ER notifies EE of garnishment Gives EE time to act 9
Withholding limits Withholding limits set by state Format like Consumer Credit Protection Act Lesser of: 25% disposable income Amount over 30x federal minimum wage States may provide more generous protection by changing definition of disposable earnings Withholding limits WA OR NV CA AK MT ID WY UT CO AZ NM ND SD NE KS OK TX MN WI IA IL MO AR MS LA NY MI PA OH IN WV VA KY NC TN SC GA AL FL ME VT NH MA RI CT NJ DE MD DC HI CCPA limits Modified CCPA: min wage multiplier Modified CCPA: % withheld Fixed amount Other Not applicable 10
Remittances ER pays creditor within 5 days Payable by check or EFT, if available Payments for multiple EEs to same creditor may be combined Duration On service, creditor declares amount owed If EE does not dispute amount, ER withholds until paid in full Garnishment ceases when ER s records show that debt is paid in full or Debtor no longer works for ER 11
Garnishment period WA OR NV CA AK MT ID WY UT CO AZ NM ND SD NE KS OK TX MN WI IA IL MO AR MS LA NY MI PA OH IN WV VA KY NC TN SC GA AL FL ME VT NH MA RI CT NJ DE MD DC HI Continuous Other (1, 60, 90, 120, 179, 180, 182 days; 13 weeks; 6, 60 months; 1 year) Not applicable Termination of employment ER tells creditor s agent within 21 days Creditor has 21 days to seek dismissal of garnishment once told: Debt is paid or Employment terminated 12
Recordkeeping ERs must Keep record of amount withheld each pay period Prepare calculation worksheet showing how payment is determined ERs provide copy upon request EE no more than 1 worksheet per pay period Creditor no more than 4 worksheets per year Multiple garnishments 2 or more garnishments of equal priority may be withheld at the same time Amounts divided equally among creditors No change to priority under state law Child support continues to have priority over creditor garnishments 26 13
Employer sanctions After receiving notification of default Fines may apply for Failure to respond to a garnishment Failure to withhold Failure to remit Fines range from $5 a day to $20 a day May not exceed amount of debt Fines paid to creditor are applied to EE s debt ER cannot recoup amount from EE 27 Employer sanctions Sanctions only imposed if debtor or creditor files a motion with the court indicating nature of misconduct Once notified of infraction, ER has time to comply Time depends on nature of misconduct Court may waive all or part of sanctions UWGA prohibits ERs from firing, punishing EE due to garnishment 28 14
Creditor sanctions Creditor wrongly seeking garnishment subject to court fine Fines not to exceed $1,000 29 Creditor sanctions Bad faith Failing to stop garnishment within 7 days of being notified garnishment is wrongful Failing to request court hearing to determine whether garnishment was wrongful After 7 days, $50 daily fine may apply 30 15
Creditor sanctions Creditors must refund $$ withheld from debtor in past 60 days Court may award or waive fines as appropriate 31 Enactment 32 16
Next steps APA and ULC working together on plan for introducing the UWGA in states in 2017 Full text of the UWGA may be found at www.uniformlaws.org/shared/docs/ wage%20garnishment/ 2016AM_WageGarnishment_As%20approved.pdf 33 Enactment WA OR NV CA AK MT ID WY UT CO AZ NM ND SD NE KS OK TX MN WI IA IL MO AR MS LA NY MI PA OH IN WV VA KY NC TN SC GA AL FL ME VT NH MA RI CT NJ DE MD DC HI UWGA introduced UWGA enacted 17
Graphic page 18