Section 1 Short title
This Act may be cited as the “Wage and Garnishment Equity Act of 2016” or the “WAGE Act”.
Wage and Garnishment Equity Act of 2016
A BILL
To amend the Consumer Credit Protection Act to strengthen debt collection exemptions to protect debtors and their families from poverty or bankruptcy, and for other purposes.
Sec. 2 Assignment of earnings defined
Section 302 of the Consumer Credit Protection Act (15 U.S.C. 1672) is amended by adding at the end the following:
“(d) Assignment—The term assignment—
“(1) means a contractual agreement that constitutes or contains an assignment (as described in section 444.2(a)(3) of title 16, Code of Federal Regulations), including an assignment that is revocable at the will of the individual; and
“(2) does not include an assignment described in paragraph (ii) or (iii) of section 444.2(a)(3) of title 16, Code of Federal Regulations.”
Sec. 3 Adjustment to restrictions on garnishment
Section 303(a) of the Consumer Credit Protection Act (15 U.S.C. 1673) is amended—
by striking paragraph (1);
in the matter preceding paragraph (2), by striking “garnishment may not exceed” and inserting
“(1) for an individual earning—
“(A) less than or equal to $1,200 (as adjusted for inflation every 3 years, by notice, to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics) a workweek, 10 percent of the individual’s disposable earnings for that workweek; or
“(B) more than $1,200 (as adjusted for inflation every 3 years, by notice, to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics) a workweek, 15 percent of the individual’s disposable earnings for that workweek; or”
in paragraph (2)—
by striking “thirty” and inserting “80”; and
by striking the comma at the end and inserting a period; and
in the matter following paragraph (2), by striking “whichever is less.”.
Sec. 4 Restriction on adverse employment action because of garnishment
by amending the section heading to read as follows: “Restriction on adverse employment action”; and
by striking subsection (a) and inserting the following:
“(a) In general—No employer may take any adverse employment action against an employee because the employee’s earnings have been subjected to garnishment or assignment.”
Table of contents amendment— The table of contents in title III of the Consumer Credit Protection Act (15 U.S.C. 1671 et seq.) is amended by striking the item relating to section 304 and inserting the following:
Sec. 5 State law with respect to assignments
Exemption for State-Regulated assignments—
in the section heading, by inserting “or assignments” after “garnishments”;
by inserting “or assignments” after “garnishments”; and
by inserting “or assignment” after “garnishment”.
Table of contents amendment— The table of contents in title III of the Consumer Credit Protection Act (15 U.S.C. 1671 et seq.) is amended by amending the item relating to section 305 to read as follows:
by striking “State” and inserting “State—”;
in paragraph (1), by striking “garnishments” each place such term appears and inserting “garnishments or assignments”; and
in paragraph (2), by striking “garnishment” and inserting “garnishment or assignment”.
Sec. 6 Employer liability for failure to garnish
In general— Title III of the Consumer Credit Protection Act (15 U.S.C. 1671 et seq.) is amended by adding at the end the following:
“308. Delay of garnishment; employer liability
“(a) Delay of garnishment—A garnishment order directed at an employer with fewer than 50 employees may not require such employer to garnish the earnings of the individual who is the subject of the order earlier than the later of the following:
“(1) 15 business days after such employer receives the order.
“(2) 5 business days after the date on which the individual is regularly scheduled to receive earnings.
“(3) As would otherwise be required by State law or regulation.
“(b) Employer liability—No employer with fewer than 50 employees shall be liable for failing to respond to a garnishment order unless such employer—
“(1) has been given written notice that specifies the nature of the employer’s failure to comply with the requirements of this title; and
“(2) does not correct the failure described in paragraph (1) within 15 days of receipt of such notice.”
Table of contents amendment— The table of contents in title III of the Consumer Credit Protection Act (15 U.S.C. 1671 et seq.) is amended by adding at the end the following:
Sec. 7 Exemption for amounts in deposit accounts
In general— Of the aggregate amount of funds of an individual in deposit accounts, $10,000 (as adjusted for inflation every 3 years, by notice, to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics) shall be exempt and immune from attachment or seizure with respect to any judgment related to a debt.
Inclusion of accounts— In this subsection, the term deposit accounts shall include any account, as such term is defined in section 903 of the Electronic Fund Transfer Act (15 U.S.C. 1693a).