April 10, 2003




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 Repeals outdated language concerning the liens of laborers.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.

Pflum, Liggett

    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)

PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2002 Regular or Special Session of the General Assembly.



    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 subsection (b), 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 as 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. not exceeding double the amount of wages due, and said damages
    (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).
    (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 chapter.
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).
    (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 nonprofit organization.
        (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 chapter.
        (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 employer.
        (15) Payment for the purchase or rental of tools and equipment used by the employee while performing duties for the employer.
        (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 employer.

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.