HOUSE BILL No. 1267
DIGEST OF INTRODUCED BILL
Citations Affected: IC 22-2; IC 22-5-6; IC 22-2-4.
Synopsis: Wage assignment and wage payment. Permits a wage
assignment for payment for: (1) certain uniforms; and (2) tools and
portable equipment. Increases from $800 to $3,000 the amount of the
maximum wage claim for which the commissioner of the department
of labor may take an assignment. Repeals and relocates language
making it a Class C infraction for an employer to sell merchandise or
supplies to an employee for a price higher than to the public. Repeals
a chapter concerning the regulation of wage payments, which includes:
(1) a provision requiring an employer to pay employees in commercial
paper; (2) a duplicate provision concerning frequency of wage
payments; (3) a provision containing outdated language concerning
liens of laborers; and (4) language in conflict with other law concerning
the later payment of wages. Requires an employer to make payment to
an employee, semimonthly or biweekly, for all wages earned to a date
not more than ten business days before the date of payment. Specifies
that if an employee has left employment voluntarily and the employer
does not know the whereabouts or address of the employee, the
employer is not subject to payment of liquidated damages for the
failure to pay wages timely until: (1) ten business days have elapsed
after the employee has made a demand for the wages; or (2) the
employee has given the employer the employee's address. (Current law:
(1) requires payment to be made for wages earned to a date not more
than ten days prior to the date of payment; and (2) provides that if the
employee's whereabouts are unknown, the employer is not subject to
payment of liquidated damages until the address has been furnished or
ten days have elapsed after the employee has made a demand for the
Effective: July 1, 2006.
January 10, 2006, read first time and referred to Committee on Employment and Labor.
Second Regular Session 114th General Assembly (2006)
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between statutes enacted by the 2005 Regular Session of the General Assembly.
HOUSE BILL No. 1267
A BILL FOR AN ACT to amend the Indiana Code concerning labor
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 22-2-5-1; (06)IN1267.1.1. -->
SECTION 1. IC 22-2-5-1 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2006]: Sec. 1. (a) Every person, firm,
corporation, limited liability company, or association, their trustees,
lessees, or receivers appointed by any court, doing business in Indiana,
shall pay each employee at least semimonthly or biweekly, if requested,
the amount due the employee. The payment shall be made in lawful
money of the United States, by negotiable check, draft, or money order,
or by electronic transfer to the financial institution designated by the
employee. Any contract in violation of this subsection is void.
(b) Payment shall be made for all wages earned to a date not more
than ten (10) business
days prior to the date of payment. However, this
subsection does not prevent payments being made at shorter intervals
than specified in this subsection, nor repeal any law providing for
payments at shorter intervals. However, if an employee voluntarily
leaves employment, either permanently or temporarily, the employer
shall not be required to pay the employee an amount due the employee
until the next usual and regular day for payment of wages, as
established by the employer. If an employee leaves employment
voluntarily, and without the employee's whereabouts or address being
known to the employer, the employer is not subject to section 2 of this
(1) ten (10) business days have elapsed after the employee has
made a demand for the wages due the employee; or
(2) the employee has furnished the employer with the employee's
address where the wages may be sent or forwarded.
SOURCE: IC 22-2-6-2; (06)IN1267.1.2. -->
SECTION 2. IC 22-2-6-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2006]: Sec. 2. (a) Any assignment of the wages
of an employee is valid only if all of the following conditions are
(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 of tools and portable
equipment used by the employee while performing duties for
SOURCE: IC 22-2-9-5; (06)IN1267.1.3. -->
SECTION 3. IC 22-2-9-5 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2006]: Sec. 5. (a)
The commissioner of labor
is hereby authorized to take assignments of wage claims of less than
eight hundred dollars ($800.00), three thousand dollars ($3,000),
rights of action for penalties, mechanics and other liens of workers,
without being bound by any of the technical rules with reference to the
validity of such assignments; and shall have power and authority to
prosecute actions for the collection of such claims of persons who, in
the judgment of the commissioner:
are entitled to the services of the commissioner; and
(2) have claims which are valid and enforceable in the court.
(b) The commissioner shall have power to join various claimants in
one (1) preferred claim or lien, and, in case of suit, to join them in one
(1) cause of action.
SOURCE: IC 22-5-6; (06)IN1267.1.4. -->
SECTION 4. IC 22-5-6 IS ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
Chapter 6. Employer Sales to Employees
Sec. 1. An employer may not sell to an employee of the
(1) merchandise; or
at a price higher than the price at which the employer sells the
merchandise or supplies for cash to another person who is not an
employee of the employer.
Sec. 2. A person who violates section 1 of this chapter commits
a Class C infraction.
SOURCE: IC 22-2-4; (06)IN1267.1.5. -->
SECTION 5. IC 22-2-4 IS REPEALED [EFFECTIVE JULY 1,
SOURCE: ; (06)IN1267.1.6. -->
SECTION 6. [EFFECTIVE JULY 1, 2006] (a) IC 22-2-9-5, as
amended by this act, applies to wage claims filed with the
commissioner of labor after June 30, 2006.
(b) This SECTION expires January 1, 2007.