BILL ANALYSIS
AB 1562
Page 1
GOVERNOR'S VETO
AB 1562 (Labor and Employment Committee)
As Introduced March 11, 2009
2/3 vote
LABOR & EMPLOYMENT 5-2 APPROPRIATIONS 11-5
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|Ayes:|Monning, Eng, Furutani, |Ayes:|De Leon, Ammiano, Charles |
| |Ma, Portantino | |Calderon, Davis, Fuentes, |
| | | |Hall, John A. Perez, |
| | | |Price, Skinner, Solorio, |
| | | |Torlakson |
| | | | |
|-----+--------------------------+-----+---------------------------|
|Nays:|Bill Berryhill, Gaines |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller, |
| | | |Audra Strickland |
| | | | |
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|ASSEMBLY: |47-30|(May 18, 2009) |SENATE: |24-15|(September 2, |
| | | | | |2009) |
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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 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)
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
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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.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the Division of Labor Standards Enforcement (DLSE)
would incur minor costs, probably absorbable, to modify
regulations and enforcement of this bill.
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.
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 AB 1562 is a follow up to last year's AB 3062
(Labor and Employment Committee) which set no limit on the
number of times a worker's wages could be garnished before
losing discharge protection. It was vetoed by Governor
Schwarzenegger 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 Governor Schwarzenegger's veto message by
providing that "no employer many discharge any employee by
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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 United States 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.
GOVERNOR'S VETO MESSAGE :
"Existing state and federal law protects employees from
termination due to a single wage garnishment. This bill would
prohibit an employer from terminating an employee because
garnishment of the employee's wages has been threatened or the
employee's wages have been subjected to garnishment for the
payment of five or fewer judgments at any one time.
"This bill is similar to legislation I vetoed last year. While
this measure is potentially less burdensome than last year's
bill, this measure would still require California employers to
engage in additional time-consuming, costly administrative
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processes."
Analysis Prepared by : Lorie Erickson / L. & E. / (916)
319-2091
FN: 0003264