BILL ANALYSIS
AB 1562
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Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
William W. Monning, Chair
AB 1562 (Committee on Labor and Employment) - As Introduced:
March 11, 2009
SUBJECT : Wage garnishment.
SUMMARY : Prohibits an employer from discharging an employee
because their wages have been subjected to garnishment for the
payment of five or fewer judgments at any one time.
EXISTING STATE LAW :
1)States that no employer may discharge any employee by reason
of the fact that his wages have been subjected to garnishment
"for the payment of one judgment" or if garnishment of any
employees wages has been threatened.
2)Defines "garnishment" to mean any judicial procedure through
which the wages of an employee are required to be withheld for
the payment of any debt.
3)Defines "wages" to include all amounts for labor performed by
employees of every description, whether the amount is fixed or
obtained by the standard of time, task, piece, commission
based, or other method of calculation.
EXISTING FEDERAL LAW :
Declares that no person is exempt from complying with any
state's laws prohibiting the discharge of any employee because
his or her earnings have been subjected to garnishment for more
than one indebtedness. (15 U.S.C. 1677)
FISCAL EFFECT : Unknown
COMMENTS : This bill makes a modest but important change to
current law to ensure that no one may be discharged from their
job merely because their wages have been subjected to
garnishment for a reasonable five or fewer judgments at any one
time. Existing law provides that an employer may not discharge
an employee by reason of the fact that the employee's wages have
been subjected to garnishment for the payment of "one" judgment.
AB 1562
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Therefore, the presumption is that an employer may terminate an
employee whose wages have been subject to garnishment for more
than one judgment. This bill seeks to change this.
The sponsor of this bill, the California Rural Legal Assistance
Foundation, states this bill is a follow up to last year's AB
3062 (which set no limit on the number of times a worker's wages
could be garnished before losing discharge protection). It was
vetoed by the Governor because he said it "would require
California employers to coordinate the burdensome administrative
processes and costs of processing checks to pay multiple wage
garnishments for a single employee and would also cause
confusion for employers by creating a state requirement
different than that of federal law."
AB 1562 responds to the Governor's veto message by providing
that "no employer many discharge any employee by reason of the
fact that his wages have been subjected
to garnishment for five or fewer judgments at any one time."
This change from AB 3062 ensures that workers can remain working
(and satisfy multiple judgments should they exist) without
overburdening employers. Although the 'five or fewer' standard
is indeed different than federal law, federal law expressly
declares that no person is exempt from complying with any
state's laws "prohibiting the discharge of any employee
[because] his earnings have been subjected
to garnishment for more than one indebtedness." State interests
-such as assuring that child support is paid, that local
creditors' judgments are satisfied, etc.- are compelling reasons
for ensuring that workers subject to multiple wage garnishments
should be protected from discharge, and Congress expressly
recognized this when it enacted federal law.
The California Labor Federation contends that working families
in our state face the worst economic crisis since the Great
Depression. Workers are now struggling to get by due to job
loss, outstanding medical bills, home loan rate resets/defaults,
and faltering retirement plans. In this economic climate a
person's credit history says nothing about his or her character
or ability to do a job effectively and responsibly. It is
likely that workers will increasingly be subject to wage
garnishment for multiple judgments as a result of predatory
mortgage lending and lost jobs. They should not be fired
because they cannot afford to pay their bills.
AB 1562
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PRIOR LEGISLATION :
AB 3062 (Committee on Labor and Employment) of 2008 vetoed by
the Governor was similar to this bill, but removed any
limitation and this bill has a limit of five. In his veto
message the Governor stated in part "This bill would require
California employers to coordinate the burdensome administrative
processes and costs of processing checks to pay multiple wage
garnishments for a single employee. The bill would also cause
confusion for employers by creating a state requirement
different than that of federal law. The Legislature should be
looking to lessen the confusion surrounding California labor
law, not create more."
REGISTERED SUPPORT / OPPOSITION :
Support
California Rural Legal Assistance Foundation, (sponsor)
California Labor Federation, AFL-CIO
Opposition
None on file.
Analysis Prepared by : Lorie Erickson / L. & E. / (916)
319-2091