Introduced Version




Citations Affected: IC 22-2; IC 22-5-6.

Synopsis: Wage payment issues. Provides that an employer who fails to pay an employee must pay interest at a monthly rate of 1.5% of the amount due. (Current law makes the penalty 10% per day.) Provides a procedure for an employer to deduct up to $200 due to the employer from an employee from the employee's unpaid wages. Exempts employees who are classified as exempt under the federal Fair Labor Standards Act from the state provisions concerning wage payment. Permits a wage assignment for: (1) payment for uniforms; (2) payment for tools and equipment; or (3) tuition repayment. Establishes a fee for issuing a replacement payroll check in certain circumstances. Repeals and relocates language making it a Class C infraction for an employer to sell merchandise or supplies to an employee for a price higher than to the public. Repeals a chapter concerning the regulation of wage payments, which includes the following provisions: (1) A provision requiring an employer to pay employees in commercial paper. (2) A duplicate provision concerning frequency of wage payments. (3) A provision containing obsolete language concerning liens of laborers.

Effective: July 1, 2006.

Young R Michael

    January 9, 2006, read first time and referred to Committee on Pensions and Labor.


Second Regular Session 114th General Assembly (2006)

PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
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    A BILL FOR AN ACT to amend the Indiana Code concerning labor and safety.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 22-2-5-2; (06)IN0108.1.1. -->     SECTION 1. IC 22-2-5-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 2. (a) Except as provided in subsection (b), every such person, firm, corporation, limited liability company, or association who shall fail fails to make payment of wages to any such an employee as provided in section 1 of this chapter shall as liquidated damages for such failure, pay to such the employee for each day that the amount due to him the employee remains unpaid ten percent (10%) of interest at the rate of one and one-half percent (1.5%) per month on the amount due to him the employee in addition thereto. not exceeding double the amount of wages due, and said damages to the wages due.
    (b) Upon termination of an employment relationship, the employer shall pay to the employee the unpaid wages minus any amount deducted as due to the employer from the employee. However, the amount deducted may not exceed two hundred dollars ($200).
    (c) At the employee's request, an employer that deducts an

amount under subsection (b) shall provide the employee with a written notice itemizing the amounts deducted. The employer shall provide the written notice required by this subsection not later than fourteen (14) days after the date of the employee's request.
    (d) The wages, including any amount in disagreement under subsection (b),
may be recovered in any court having jurisdiction of a suit to recover the amount due to such the employee, and in any suit so brought to recover said wages or the liquidated damages for nonpayment thereof, or both, the court shall tax and assess as costs in said case a along with reasonable fee for the plaintiff's attorney or attorneys. attorney's fees incurred by the employee.
    (e) This section does not preclude the employer or employee from recovering other damages to which either is entitled.

SOURCE: IC 22-2-5-3; (06)IN0108.1.2. -->     SECTION 2. IC 22-2-5-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 3. Employees who are classified as exempt under the federal Fair Labor Standards Act (29 U.S.C. 201 et seq.), farmers, and those engaged in the business of agriculture and horticulture shall be specifically exempt from the provisions of this chapter.
SOURCE: IC 22-2-6-2; (06)IN0108.1.3. -->     SECTION 3. IC 22-2-6-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 2. (a) Any assignment of the wages of an employee is valid only if all of the following conditions are satisfied:
        (1) The assignment is:
            (A) in writing;
            (B) signed by the employee personally;
            (C) by its terms revocable at any time by the employee upon written notice to the employer; and
            (D) agreed to in writing by the employer.
        (2) An executed copy of the assignment is delivered to the employer within ten (10) days after its execution.
        (3) The assignment is made for a purpose described in subsection (b).
    (b) A wage assignment under this section may be made for the purpose of paying any of the following:
        (1) Premium on a policy of insurance obtained for the employee by the employer.
        (2) Pledge or contribution of the employee to a charitable or nonprofit organization.
        (3) Purchase price of bonds or securities, issued or guaranteed by the United States.
        (4) Purchase price of shares of stock, or fractional interests

therein, of the employing company, or of a company owning the majority of the issued and outstanding stock of the employing company, whether purchased from such company, in the open market or otherwise. However, if such shares are to be purchased on installments pursuant to a written purchase agreement, the employee has the right under the purchase agreement at any time before completing purchase of such shares to cancel said agreement and to have repaid promptly the amount of all installment payments which theretofore have been made.
        (5) Dues to become owing by the employee to a labor organization of which the employee is a member.
        (6) Purchase price of merchandise sold by the employer to the employee, at the written request of the employee.
        (7) Amount of a loan made to the employee by the employer and evidenced by a written instrument executed by the employee subject to the amount limits set forth in section 4(c) of this chapter.
        (8) Contributions, assessments, or dues of the employee to a hospital service or a surgical or medical expense plan or to an employees' association, trust, or plan existing for the purpose of paying pensions or other benefits to said employee or to others designated by the employee.
        (9) Payment to any credit union, nonprofit organizations, or associations of employees of such employer organized under any law of this state or of the United States.
        (10) Payment to any person or organization regulated under the Uniform Consumer Credit Code (IC 24-4.5) for deposit or credit to the employee's account by electronic transfer or as otherwise designated by the employee.
        (11) Premiums on policies of insurance and annuities purchased by the employee on the employee's life.
        (12) The purchase price of shares or fractional interest in shares in one (1) or more mutual funds.
        (13) A judgment owed by the employee if the payment:
            (A) is made in accordance with an agreement between the employee and the creditor; and
            (B) is not a garnishment under IC 34-25-3.
         (14) Payment for the purchase or maintenance of uniforms worn by the employee while performing duties for the employer.
        (15) Payment for the purchase or rental of tools and equipment used by the employee while performing duties for

the employer.
        (16) Payment or repayment of the employee's tuition for:
            (A) a postsecondary educational institution;
            (B) an apprenticeship training program; or
            (C) an educational training program;
        approved by the employer.

SOURCE: IC 22-2-8-1; (06)IN0108.1.4. -->     SECTION 4. IC 22-2-8-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 1. (a) An employer who deducts the fee described in section 4 of this chapter does not violate this section.
It is unlawful for any employer to assess a fine on any pretext against any employee and retain the same or any part thereof from his the employee's wages.
     (c) An employer who violates this section commits a Class C infraction.
SOURCE: IC 22-2-8-4; (06)IN0108.1.5. -->     SECTION 5. IC 22-2-8-4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 4. (a) Notwithstanding section 1 of this chapter, an employer may deduct from an employee's wages a fee computed under subsection (b) to issue a replacement payroll check at the written request of the employee because of theft, destruction, or other loss of the original payroll check after receipt by the employee.
    (b) The fee described in subsection (a) is equal to:
        (1) the amount charged the employer by a financial institution to stop payment on the original payroll check; plus
        (2) the lesser of:
            (A) the employer's reasonable costs incurred to reissue the payroll check; or
            (B) twenty dollars ($20).

     Chapter 6. Employer Sales to Employees
    Sec. 1.
An employer may not sell to an employee of the employer any:
        (1) merchandise; or
        (2) supplies;
at a price higher than the employer sells the merchandise or supplies for cash to another person who is not an employee of the employer.
    Sec. 2. A person who violates section 1 of this chapter commits

a Class C infraction.

SOURCE: IC 22-2-4; (06)IN0108.1.7. -->     SECTION 7. IC 22-2-4 IS REPEALED [EFFECTIVE JULY 1, 2006].
SOURCE: ; (06)IN0108.1.8. -->     SECTION 8. [EFFECTIVE JULY 1, 2006] IC 22-2-8-4, as added by this act, applies to wages first payable after June 30, 2006.