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Uniform WageGarnishment Act

Agenda

What is it?

Why do we need it?

Major provisions

Enactment

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Who is the ULC?

National Conference of Commissionersfor Uniform State Laws• Uniform Interstate Family Support Act

• Uniform Electronic Transactions Act

• Uniform Commercial Code

• Hundreds more…

Highlights

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Limited role for courts

Answer directly to creditor

• Reduce court costs

• ERs won’t needattorneys tohandle garnishments

Parties retain right to petition court

“Employee” defined

Workers treated as EEs for FIT

Former EEs owed earnings

Independent contractors receivingperiodic payments from employer

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Principal place of employment

Garnishment served in state of EE’sprincipal place of employment• EE can attend court proceeding without

traveling out of state

• Exemption if ER is not subject to jurisdiction inthe 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 receivingpayments

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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?

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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 deductedfrom paycheck

APA suggests $3.50

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NM OK

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IL IN

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MEWA

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RI

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Per payment fee (11) No fee allowed for creditor garnishment (25)One-time fee (13) Up-front and per payment fee (2)

Administrative fees

Garnishee response

ER has 21 days to answer

Reasons for refusal:• EE doesn’t work for ER

• Garnishment not served inEE’s work state

• Order is incomplete

• No administrative fee

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HI

OH

CAVA

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ORSD

MO

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NC

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AZ

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NM OK

TN

NE

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LA

IL IN

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MEWA

NH

VT

MA

RI

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NJ

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MD

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Garnishee response time

immediatelyWithin 1 week (2-7 days)Within 2 weeks

Within 3 weeks (15-21 days)30 days or moreVaries, 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 todetermine whether ERmust proceed

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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 ERnotifies EE of garnishment• Gives EE time to act

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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 protectionby changing definition of disposable earnings

AK

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OH

CAVA

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NM OK

TN

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IL IN

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MEWA

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MA

RI

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CCPA limitsModified CCPA: min wage multiplierModified CCPA: % withheld

Withholding limits

Fixed amountOtherNot applicable

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Remittances

ER pays creditorwithin 5 days

Payable by checkor EFT, if available

Payments formultiple EEs tosame creditor maybe combined

Duration

On service, creditor declares amountowed

If EE does not dispute amount, ERwithholds until paid in full

Garnishment ceases when• ER’s records show that debt is paid in full or

• Debtor no longer works for ER

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AK

HI

OH

CAVA

MI

GA

KS

IA PA

WV

MS

ORSD

MO

WI

MN

KY

SC

FL

NC

UT

AZ

ND

NM OK

TN

NE

WY

LA

IL IN

AR

NY

CO

AL

MT

ID

NV

TX

MEWA

NH

VT

MA

RI

CT

NJ

DE

MD

DC

ContinuousOther (1, 60, 90, 120, 179, 180, 182 days; 13 weeks; 6, 60 months; 1 year)Not applicable

Garnishment period

Termination of employment

ER tells creditor’s agent within 21 days

Creditor has 21 days to seek dismissalof garnishment once told:• Debt is paid or

• Employment terminated

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Recordkeeping

ERs must• Keep record of amount withheld each pay

period

• Prepare calculation worksheet showing howpayment 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 prioritymay 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

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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 orcreditor files a motion with the courtindicating 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, punishingEE due to garnishment

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Creditor sanctions

Creditor wrongly seeking garnishmentsubject to court fine• Fines not to exceed $1,000

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Creditor sanctions

Bad faith• Failing to stop garnishment within 7 days of

being notified garnishment is wrongful

• Failing to request court hearing to determinewhether garnishment was wrongful

• After 7 days, $50 daily fine may apply

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Creditor sanctions

Creditors must refund $$ withheld fromdebtor in past 60 days• Court may award or waive fines as appropriate

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Enactment

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Next steps

APA and ULC working together on plan forintroducing the UWGA in states in 2017

Full text of the UWGA may be found atwww.uniformlaws.org/shared/docs/wage%20garnishment/2016AM_WageGarnishment_As%20approved.pdf

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NM OK

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UWGA introducedUWGA enacted

Enactment

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