CHAPTER 6. WAGE DEDUCTIONS
IC 22-2-6
Chapter 6. Wage Deductions
IC 22-2-6-1
Definitions
Sec. 1. (a) Any direction given by an employee to an employer tomake a deduction from the wages to be earned by said employee,after said direction is given, shall constitute an assignment of thewages of said employee.
(b) For the purpose of this chapter, the term "employer" shall alsoinclude the state and any political subdivision of the state.
(Formerly: Acts 1945, c.183, s.1; Acts 1965, c.301, s.1.) As amendedby P.L.144-1986, SEC.10; P.L.143-1988, SEC.2.
IC 22-2-6-2
Assignment of wages; requisites
Sec. 2. (a) Any assignment of the wages of an employee is validonly if all of the following conditions are satisfied:
(1) The assignment is:
(A) in writing;
(B) signed by the employee personally;
(C) by its terms revocable at any time by the employee uponwritten notice to the employer; and
(D) agreed to in writing by the employer.
(2) An executed copy of the assignment is delivered to theemployer within ten (10) days after its execution.
(3) The assignment is made for a purpose described insubsection (b).
(b) A wage assignment under this section may be made for thepurpose of paying any of the following:
(1) Premium on a policy of insurance obtained for the employeeby the employer.
(2) Pledge or contribution of the employee to a charitable ornonprofit organization.
(3) Purchase price of bonds or securities, issued or guaranteedby the United States.
(4) Purchase price of shares of stock, or fractional intereststherein, of the employing company, or of a company owning themajority of the issued and outstanding stock of the employingcompany, whether purchased from such company, in the openmarket or otherwise. However, if such shares are to bepurchased on installments pursuant to a written purchaseagreement, the employee has the right under the purchaseagreement at any time before completing purchase of suchshares to cancel said agreement and to have repaid promptly theamount of all installment payments which theretofore have beenmade.
(5) Dues to become owing by the employee to a labororganization of which the employee is a member.
(6) Purchase price of merchandise sold by the employer to the
employee, at the written request of the employee.
(7) Amount of a loan made to the employee by the employerand evidenced by a written instrument executed by theemployee subject to the amount limits set forth in section 4(c)of this chapter.
(8) Contributions, assessments, or dues of the employee to ahospital service or a surgical or medical expense plan or to anemployees' association, trust, or plan existing for the purpose ofpaying pensions or other benefits to said employee or to othersdesignated by the employee.
(9) Payment to any credit union, nonprofit organizations, orassociations of employees of such employer organized underany law of this state or of the United States.
(10) Payment to any person or organization regulated under theUniform Consumer Credit Code (IC 24-4.5) for deposit orcredit to the employee's account by electronic transfer or asotherwise designated by the employee.
(11) Premiums on policies of insurance and annuities purchasedby the employee on the employee's life.
(12) The purchase price of shares or fractional interest in sharesin one (1) or more mutual funds.
(13) A judgment owed by the employee if the payment:
(A) is made in accordance with an agreement between theemployee and the creditor; and
(B) is not a garnishment under IC 34-25-3.
(Formerly: Acts 1945, c.183, s.2; Acts 1947, c.330, s.1; Acts 1963,c.148, s.1; Acts 1975, P.L.251, SEC.1.) As amended byP.L.143-1988, SEC.3; P.L.115-1994, SEC.1; P.L.83-2001, SEC.1.
IC 22-2-6-3
Validation of deductions
Sec. 3. All deductions made before July 1, 1988, by an employerfrom the wages of an employee, at the request of the employee, orwithout the objection of the employee, provided the amount sodeducted was either retained by the employer and credited upon anindebtedness owing to the employer by the employee, or paid by theemployer in accordance with the request of the employee, or withoutthe employee's objection, are hereby legalized, and no action shall bebrought or maintained against the employer to recover from theemployer the amount so retained or paid.
(Formerly: Acts 1945, c.183, s.4.) As amended by P.L.143-1988,SEC.4.
IC 22-2-6-4
Overpayment by employer
Sec. 4. (a) If an employer has overpaid an employee, the employermay deduct from the wages of the employee the amount of theoverpayment. A deduction by an employer for reimbursement of anoverpayment of wages previously made to an employee is not a fineunder IC 22-2-8-1 or an assignment of wages under section 2 of this
chapter. An employer must give an employee two (2) weeks noticebefore the employer may deduct, under this section, any overpaymentof wages from the employee's wages.
(b) An employer may not deduct from an employee's wages anamount in dispute under IC 22-2-9-3.
(c) The amount of a wage deduction made by an employer undersubsection (a) is limited to the following:
(1) Except as provided in subdivision (2), the maximum part ofthe aggregate disposable earnings of an employee for any workweek that is subjected to an employer deduction foroverpayment may not exceed the lesser of:
(A) twenty-five percent (25%) of the employee's disposableearnings for that week; or
(B) the amount by which the employee's disposable earningsfor that week exceed thirty (30) times the federal minimumhourly wage prescribed by 29 U.S.C. 206(a)(1) in effect atthe time the earnings are payable.
In the case of earnings for a pay period other than a week, theearnings must be computed upon a multiple of the federalminimum hourly wage equivalent to thirty (30) times the federalminimum hourly wage as prescribed in this section.
(2) If a single gross wage overpayment is equal to ten (10) timesthe employee's gross wages earned due to an inadvertentmisplacement of a decimal point, the entire overpayment maybe deducted immediately.
As added by P.L.215-1995, SEC.1.