April 10, 2003
HOUSE BILL No. 1481
DIGEST OF HB 1481
(Updated April 9, 2003 6:18 PM - DI 102)
Citations Affected: IC 22-2; noncode.
Synopsis: Wage payment issues. Provides a procedure for: (1) an
employee to recover from an employer amounts due for unpaid wages;
and (2) an employer to deduct amounts due to the employer from the
employee from unpaid wages due to the employee. Provides that these
procedures do not preclude the employer or the employee from
recovering other damages to which either is entitled. Specifies that
employees classified as exempt under the federal Fair Labor Standards
Act are exempt from Indiana's wage payment law. Authorizes voluntary
wage assignments for: (1) uniform purchase or maintenance; (2) the
purchase or rental of tools; and (3) the payment or repayment of tuition.
Increases from $600 to $2,000 the maximum amount an employee may
claim as unpaid compensation against an employer that goes out of
business or files bankruptcy. Repeals outdated language concerning the
liens of laborers.
Effective: July 1, 2003.
(SENATE SPONSORS _ HARRISON, CRAYCRAFT, ANTICH)
January 15, 2003, read first time and referred to Committee on Labor and Employment.
January 23, 2003, reported _ Do Pass. Referred to Committee on Ways and Means
pursuant to Rule 127.
February 26, 2003, reported _ Do Pass.
March 3, 2003, read second time, ordered engrossed. Engrossed.
March 4, 2003, read third time, passed. Yeas 98, nays 0.
March 10, 2003, read first time and referred to Committee on Pensions and Labor.
April 3, 2003, reported favorably _ Do Pass.
April 9, 2003, read second time, amended, ordered engrossed.
April 10, 2003
First Regular Session 113th General Assembly (2003)
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HOUSE BILL No. 1481
A BILL FOR AN ACT to amend the Indiana Code concerning labor
and industrial safety.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 22-2-5-2; (03)EH1481.2.1. -->
SECTION 1. IC 22-2-5-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 2. (a) Except as provided in
every such person, firm, corporation, limited liability
company, or association who shall fail to make payment of wages to
any such employee as provided in section 1 of this chapter shall
liquidated damages for such failure,
pay to such employee for each day
that the amount due to
him the employee
remains unpaid ten percent
(10%) of the amount due to him in addition thereto.
double the amount of wages due, and
(b) Upon termination of an employment relationship, the
employer shall pay to the employee the unpaid wages minus any
amount deducted for amounts applied as due to the employer from
the employee, for a purpose related to the employment, as itemized
by the employer with the amount due in a written notice
accompanying the unpaid wages.
(c) If the employer fails to provide the written notice in
conjunction with the unpaid wages, the employee may recover the
amount in disagreement in an action brought under subsection (d).
The wages, including any amount in disagreement under
subsection (b), may be recovered in any court having jurisdiction of a
suit to recover the amount due to such employee, and in any suit so
brought to recover said wages or the liquidated damages for
nonpayment thereof, or both, the court shall tax and assess as costs in
said case a along with reasonable fee for the plaintiff's attorney or
attorneys. attorney's fees.
(e) This section does not preclude the employer or employee
from recovering other damages to which either is entitled.
SOURCE: IC 22-2-5-3; (03)EH1481.2.2. -->
SECTION 2. IC 22-2-5-3 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 3. Employees who are classified
as exempt under the Fair Labor Standards Act (29 U.S.C. 201
et.seq.), farmers, and those engaged in the business of agriculture and
horticulture shall be specifically exempt from the provisions of this
SOURCE: IC 22-2-6-2; (03)EH1481.2.3. -->
SECTION 3. IC 22-2-6-2, AS AMENDED BY P.L.83-2001,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 2. (a) Any assignment of the wages of an
employee is valid only 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 upon
written notice to the employer; and
(D) agreed to in writing by the employer.
(2) An executed copy of the assignment is delivered to the
employer within ten (10) days after its execution.
(3) The assignment is made for a purpose described in subsection
(b) A wage assignment under this section may be made for the
purpose of paying any of the following:
(1) Premium on a policy of insurance obtained for the employee
by the employer.
(2) Pledge or contribution of the employee to a charitable or
(3) Purchase price of bonds or securities, issued or guaranteed by
the United States.
(4) Purchase price of shares of stock, or fractional interests
therein, of the employing company, or of a company owning the
majority of the issued and outstanding stock of the employing
company, whether purchased from such company, in the open
market or otherwise. However, if such shares are to be purchased
on installments pursuant to a written purchase agreement, the
employee has the right under the purchase agreement at any time
before completing purchase of such shares to cancel said
agreement and to have repaid promptly the amount of all
installment payments which theretofore have been made.
(5) Dues to become owing by the employee to a labor
organization 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 employer and
evidenced by a written instrument executed by the employee
subject to the amount limits set forth in section 4(c) of this
(8) Contributions, assessments, or dues of the employee to a
hospital service or a surgical or medical expense plan or to an
employees' association, trust, or plan existing for the purpose of
paying pensions or other benefits to said employee or to others
designated by the employee.
(9) Payment to any credit union, nonprofit organizations, or
associations of employees of such employer organized under any
law of this state or of the United States.
(10) Payment to any person or organization regulated under the
Uniform Consumer Credit Code (IC 24-4.5) for deposit or credit
to the employee's account by electronic transfer or as otherwise
designated by the employee.
(11) Premiums on policies of insurance and annuities purchased
by the employee on the employee's life.
(12) The purchase price of shares or fractional interest in shares
in 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 the
employee and the creditor; and
(B) is not a garnishment under IC 34-25-3.
(14) Payment for the purchase or maintenance of uniforms
worn by the employee while performing duties for the
(15) Payment for the purchase or rental of tools and
equipment used by the employee while performing duties for
(16) Payment or repayment of the employee's tuition for:
(A) a postsecondary educational institution;
(B) an apprenticeship training program; or
(C) an educational training program approved by the
SOURCE: IC 22-2-10-1; (03)EH1481.2.4. -->
SECTION 4. IC 22-2-10-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 1.
Hereafter, When the
property of any company, corporation, limited liability company, firm,
or person, engaged in any manufacturing, mechanical, agricultural, or
other business or employment, or in the construction of any work or
building, shall be seized upon any mesne or final process of any court
of the state, or where their business shall be suspended by the action of
creditors or put into the hands of any assignee, receiver, or trustee, then
in all such cases the debts owing to laborers or employees which have
accrued by reason of their labor or employment to shall have a claim
for an amount not exceeding six hundred two thousand dollars ($600)
to each ($2,000) per employee for work and labor performed within
three (3) months next preceding before the seizure of such property.
This claim shall be considered and treated as preferred debts and such
the laborers or employees having a claim for unpaid compensation
shall be preferred creditors and shall be first paid in full, and if there be
not sufficient to pay them in full then the same shall be paid to them
pro rata, after paying costs; however, the term employees as used in
this section shall include traveling salesmen, traveling agents, and
manufacturers' agents, whether they are employed under monthly or
yearly contracts or otherwise.
SOURCE: IC 22-2-4-1; IC 22-2-4-2; IC 22-2-4-4; IC 22-2-4-6.
; (03)EH1481.2.5. -->
SECTION 5. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2003]: IC 22-2-4-1; IC 22-2-4-2; IC 22-2-4-4; IC 22-2-4-6.
SOURCE: ; (03)EH1481.2.6. -->
SECTION 6. [EFFECTIVE JULY 1, 2003] IC 22-2-10-1, as
amended by this act, applies to compensation first payable after
June 30, 2003.