BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: July 8, 2009 2009-2010 Regular
Session
Consultant: Rodger Dillon Fiscal:Yes
Urgency: No
Bill No: AB 1562
Author: Assembly Labor and Employment Committee
Version: As introduced March 11, 2009
SUBJECT
Employment: termination: garnishment of wages.
KEY ISSUE
Should employers be able to terminate an employee whose wages
have been subjected to more than one garnishment for the payment
of a judgment?
PURPOSE
To limit the circumstances under which an employee may be
terminated by an employer as a consequence of the employee's
wages being subjected to garnishments.
ANALYSIS
Existing law prohibits an employer from terminating an employee
because garnishment (a lawfully-ordered securing/holding) of an
employee's wages has been threatened, or where it has been
ordered for the payment of one judgment.
This Bill would prohibit the termination of an employee when an
employee's wages have been subjected to garnishment for the
payment of 5 or fewer judgments at any one time.
COMMENTS
1. Need for this bill?
The sponsor of this bill, California Rural Legal Assistance
Foundation (CRLA) believes a technical correction is needed in
the law. A California Law Revision Commission commentary on
the referenced language (at the time of passage in 1971)
stated, "The statute does not reflect any policy that
discharge of an employee is justified merely because his wages
have been garnished for two or more judgments." However, CRLA
notes that when their attorneys were reviewing the case of an
individual who was worried about a potential termination
because he had recently been subject to a second garnishment
the attorneys were unable to give him firm assurances that he
was protected from discharge. CRLA and the Assembly Labor
Committee believe that in these uncertain economic times this
matter needs to be clarified in law.
2. Proponent Arguments :
Proponents argue that California families are facing economic
insecurity. They are losing their homes at record rates,
facing greater unemployment, and being forced into bankruptcy.
It is likely, supporters say, that workers will be
increasingly subjected to wage garnishment for multiple
judgments as a result of predatory mortgage lending, stagnant
wages, and skyrocketing inflation. Workers should not be
fired simply because they cannot afford to pay their bills.
This bill clarifies an important protection for low-wage
workers and prevents further economic hardship. This bill
seeks to find a reasonable compromise following the veto last
year of AB3062 (Asm Labor Committee), which said that an
employee should not be terminated for any number of wage
garnishments. Supporters also note that federal law expressly
declares that no person is exempt from complying with any
state's laws prohibiting the discharge of employees because
his or her earnings have been subjected to garnishment for
more than one indebtedness.
3. Opponent Arguments :
None received.
4. Prior Legislation :
Hearing Date: July 8, 2009 AB 1562
Consultant: Rodger Dillon Page 2
Senate Committee on Labor and Industrial Relations
AB3062 (Assembly Labor Committee) of 2008 was a very similar
bill that would have prohibited any employer from terminating
an employee for any number of wage garnishments. AB3062 was
approved by the Legislature but vetoed by the governor, who
stated in his veto message:
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.
SUPPORT
California Rural Legal Assistance Foundation (sponsor)
California Labor Federation
OPPOSITION
None received.
* * *
Hearing Date: July 8, 2009 AB 1562
Consultant: Rodger Dillon Page 3
Senate Committee on Labor and Industrial Relations