SENATE BILL No. 108
DIGEST OF INTRODUCED BILL
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)
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between statutes enacted by the 2005 Regular Session of the General Assembly.
SENATE BILL No. 108
A BILL FOR AN ACT to amend the Indiana Code concerning labor
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
person, firm, corporation, limited liability
company, or association who
shall fail fails
to make payment of wages
any such an
employee as provided in section 1 of this chapter shall
as liquidated damages for such failure,
each day that the amount due to
him the employee
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
thereto. not exceeding double the amount of wages due, and
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
(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
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
(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) 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
(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
(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
(15) Payment for the purchase or rental of tools and
equipment used by the employee while performing duties for
(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
(b) 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
the employee's wages.
(c) An employer who violates this section commits a Class C
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
(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).
SOURCE: IC 22-5-6; (06)IN0108.1.6. -->
SECTION 6. IC 22-5-6 IS ADDED TO THE INDIANA CODE AS
CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
Chapter 6. Employer Sales to Employees
Sec. 1. An employer may not sell to an employee of the employer
(1) merchandise; or
at a price higher than the employer sells the merchandise or
supplies for cash to another person who is not an employee of the
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,
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.