WAGE Act

To amend the Consumer Credit Protection Act to strengthen debt collection exemptions to protect debtors and their families from poverty or bankruptcy, and for other purposes. 1. Short title This Act may be cited as the Wage and Garnishment Equity Act of 2016 WAGE Act 2. Assignment of earnings defined Section 302 of the Consumer Credit Protection Act ( 15 U.S.C. 1672 (d) Assignment The term assignment (1) means a contractual agreement that constitutes or contains an assignment (as described under 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 includes an assignment described in paragraph (ii) or (iii) of section 444.2(a)(3) of title 16, Code of Federal Regulations. . 3. Adjustment to restrictions on garnishment Section 303(a) of the Consumer Credit Protection Act ( 15 U.S.C. 1673 (1) by striking paragraph (1); (2) by striking whichever is less. (3) by striking garnishment may not exceed 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 ; and (4) in paragraph (2)— (A) by striking thirty 80 (B) by striking the comma at the end and inserting a period. 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 (1) by amending the section heading to read as follows: Restriction on adverse employment action (2) by amending subsection (a) to read as follows: (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. 304. Restriction on adverse employment action. . 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 (A) in the section heading, by inserting or assignments garnishments (B) by inserting or assignments garnishments (C) by inserting or assignment 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. 305. Exemption for State-regulated garnishments or assignments. . (b) Effect on State laws Section 307 of such Act ( 15 U.S.C. 1676 (1) by striking State State— (2) in paragraph (1), by striking garnishments garnishments or assignments (3) in paragraph (2), by striking garnishment garnishment or assignment 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. 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. 308. Delay of garnishment; employer liability. . 7. Exemption for amounts in deposit accounts (a) In general Of the aggregate amount of funds of an individual in deposit accounts, an amount equal to the poverty guideline applicable to a 1-person household contained in the income poverty guidelines prescribed by the Office of Management and Budget (as such amount is annually adjusted by the Secretary of Health and Human Services) 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 15 U.S.C. 1693a (c) Rulemaking The Bureau of Consumer Financial Protection shall issue such regulations as may be necessary to carry out this section.

Summary: Wage and Garnishment Equity Act of 2016 or the WAGE Act This bill amends the Consumer Credit Protection Act to define "assignment" (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, an amount equal to the federal poverty guideline applicable to a one-person household shall be exempt and immune from attachment or seizure for any judgment related to a debt.