WAGE Act

Summary: Wage and Garnishment Equity Act of 2016 or the WAGE Act This bill amends the Consumer Credit Protection Act to define &quot;assignment&quot; (of wages and earnings) to exclude payroll deductions or preauthorized payment plans and any assignment applicable only to earnings already earned.  The bill adjusts the maximum part of a person's aggregate disposable earnings for any workweek that is subject to garnishment or assignment. Such amount shall not exceed the lesser of: (1) 10% of earnings for an individual earning $1200 or less weekly (15% for an individual earning more than $1200), or (2) the amount by which the earnings exceed 80 (currently, 30) times the federal minimum hourly wage in effect. No employer may take any adverse employment action against an employee because the employee's earnings have been subject to garnishment or assignment. The Department of Labor may provide the same exemption from maximum allowable garnishment requirements for state-regulated assignments as it does for state-regulated garnishments. The bill requires specified delays of garnishment pursuant to an order directed at an employer with fewer than 50 employees. Of the aggregate amount of an individual's funds in deposit accounts, $10,000 (as adjusted for inflation every three years) shall be exempt and immune from attachment or seizure for any judgment related to a debt.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wage and Garnishment Equity Act of 
2016'' or the ``WAGE Act''.

SEC. 2. ASSIGNMENT OF EARNINGS DEFINED.

    Section 302 of the Consumer Credit Protection Act (15 U.S.C. 1672) 
is amended by adding at the end the following:
    ``(d) Assignment.--The term `assignment'--
            ``(1) means a contractual agreement that constitutes or 
        contains an assignment (as described in section 444.2(a)(3) of 
        title 16, Code of Federal Regulations), including an assignment 
        that is revocable at the will of the individual; and
            ``(2) does not include an assignment described in paragraph 
        (ii) or (iii) of section 444.2(a)(3) of title 16, Code of 
        Federal Regulations.''.

SEC. 3. ADJUSTMENT TO RESTRICTIONS ON GARNISHMENT.

    Section 303(a) of the Consumer Credit Protection Act (15 U.S.C. 
1673) is amended--
            (1) by striking paragraph (1);
            (2) in the matter preceding paragraph (2), by striking 
        ``garnishment may not exceed'' and inserting ``garnishment or 
        assignment may not exceed the lesser of--
            ``(1) for an individual earning--
                    ``(A) less than or equal to $1,200 (as adjusted for 
                inflation every 3 years, by notice, to reflect the 
                change in the Consumer Price Index for All Urban 
                Consumers published by the Bureau of Labor Statistics) 
                a workweek, 10 percent of the individual's disposable 
                earnings for that workweek; or
                    ``(B) more than $1,200 (as adjusted for inflation 
                every 3 years, by notice, to reflect the change in the 
                Consumer Price Index for All Urban Consumers published 
                by the Bureau of Labor Statistics) a workweek, 15 
                percent of the individual's disposable earnings for 
                that workweek; or'';
            (3) in paragraph (2)--
                    (A) by striking ``thirty'' and inserting ``80''; 
                and
                    (B) by striking the comma at the end and inserting 
                a period; and
            (4) in the matter following paragraph (2), by striking 
        ``whichever is less.''.

SEC. 4. RESTRICTION ON ADVERSE EMPLOYMENT ACTION BECAUSE OF 
              GARNISHMENT.

    (a) In General.--Section 304 of the Consumer Credit Protection Act 
(15 U.S.C. 1674) is amended--
            (1) by amending the section heading to read as follows: 
        ``restriction on adverse employment action''; and
            (2) by striking subsection (a) and inserting the following:
    ``(a) In General.--No employer may take any adverse employment 
action against an employee because the employee's earnings have been 
subjected to garnishment or assignment.''.
    (b) Table of Contents Amendment.--The table of contents in title 
III of the Consumer Credit Protection Act (15 U.S.C. 1671 et seq.) is 
amended by striking the item relating to section 304 and inserting the 
following:

``304. Restriction on adverse employment action.''.

SEC. 5. STATE LAW WITH RESPECT TO ASSIGNMENTS.

    (a) Exemption for State-Regulated Assignments.--
            (1) In general.--Section 305 of the Consumer Credit 
        Protection Act (15 U.S.C. 1675) is amended--
                    (A) in the section heading, by inserting ``or 
                assignments'' after ``garnishments'';
                    (B) by inserting ``or assignments'' after 
                ``garnishments''; and
                    (C) by inserting ``or assignment'' after 
                ``garnishment''.
            (2) Table of contents amendment.--The table of contents in 
        title III of the Consumer Credit Protection Act (15 U.S.C. 1671 
        et seq.) is amended by amending the item relating to section 
        305 to read as follows:

``305. Exemption for State-regulated garnishments or assignments.''.
    (b) Effect on State Laws.--Section 307 of such Act (15 U.S.C. 1676) 
is amended--
            (1) by striking ``State'' and inserting 
        ``State--'';
            (2) in paragraph (1), by striking ``garnishments'' each 
        place such term appears and inserting ``garnishments or 
        assignments''; and
            (3) in paragraph (2), by striking ``garnishment'' and 
        inserting ``garnishment or assignment''.

SEC. 6. EMPLOYER LIABILITY FOR FAILURE TO GARNISH.

    (a) In General.--Title III of the Consumer Credit Protection Act 
(15 U.S.C. 1671 et seq.) is amended by adding at the end the following:
``Sec. 308. Delay of garnishment; employer liability
    ``(a) Delay of Garnishment.--A garnishment order directed at an 
employer with fewer than 50 employees may not require such employer to 
garnish the earnings of the individual who is the subject of the order 
earlier than the later of the following:
            ``(1) 15 business days after such employer receives the 
        order.
            ``(2) 5 business days after the date on which the 
        individual is regularly scheduled to receive earnings.
            ``(3) As would otherwise be required by State law or 
        regulation.
    ``(b) Employer Liability.--No employer with fewer than 50 employees 
shall be liable for failing to respond to a garnishment order unless 
such employer--
            ``(1) has been given written notice that specifies the 
        nature of the employer's failure to comply with the 
        requirements of this title; and
            ``(2) does not correct the failure described in paragraph 
        (1) within 15 days of receipt of such notice.''.
    (b) Table of Contents Amendment.--The table of contents in title 
III of the Consumer Credit Protection Act (15 U.S.C. 1671 et seq.) is 
amended by adding at the end the following:

``308. Delay of garnishment; employer liability.''.

SEC. 7. EXEMPTION FOR AMOUNTS IN DEPOSIT ACCOUNTS.

    (a) In General.--Of the aggregate amount of funds of an individual 
in deposit accounts, $10,000 (as adjusted for inflation every 3 years, 
by notice, to reflect the change in the Consumer Price Index for All 
Urban Consumers published by the Bureau of Labor Statistics) shall be 
exempt and immune from attachment or seizure with respect to any 
judgment related to a debt.
    (b) Inclusion of Accounts.--In this subsection, the term ``deposit 
accounts'' shall include any account, as such term is defined in 
section 903 of the Electronic Fund Transfer Act (15 U.S.C. 1693a).