CHAPTER 6. WAGE DEDUCTIONS
IC 22-2-6
Chapter 6. Wage Deductions
IC 22-2-6-1
Definitions
Sec. 1. (a) Any direction given by an employee to an employer to
make a deduction from the wages to be earned by said employee,
after said direction is given, shall constitute an assignment of the
wages of said employee.
(b) For the purpose of this chapter, the term "employer" shall also
include the state and any political subdivision of the state.
(Formerly: Acts 1945, c.183, s.1; Acts 1965, c.301, s.1.) As amended
by P.L.144-1986, SEC.10; P.L.143-1988, SEC.2.
IC 22-2-6-2
Assignment of wages; requisites
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.
(Formerly: Acts 1945, c.183, s.2; Acts 1947, c.330, s.1; Acts 1963,
c.148, s.1; Acts 1975, P.L.251, SEC.1.) As amended by
P.L.143-1988, SEC.3; P.L.115-1994, SEC.1; P.L.83-2001, SEC.1.
IC 22-2-6-3
Validation of deductions
Sec. 3. All deductions made before July 1, 1988, by an employer
from the wages of an employee, at the request of the employee, or
without the objection of the employee, provided the amount so
deducted was either retained by the employer and credited upon an
indebtedness owing to the employer by the employee, or paid by the
employer in accordance with the request of the employee, or without
the employee's objection, are hereby legalized, and no action shall be
brought or maintained against the employer to recover from the
employer the amount so retained or paid.
(Formerly: Acts 1945, c.183, s.4.) As amended by P.L.143-1988,
SEC.4.
IC 22-2-6-4
Overpayment by employer
Sec. 4. (a) If an employer has overpaid an employee, the employer
may deduct from the wages of the employee the amount of the
overpayment. A deduction by an employer for reimbursement of an
overpayment of wages previously made to an employee is not a fine
under IC 22-2-8-1 or an assignment of wages under section 2 of this
chapter. An employer must give an employee two (2) weeks notice
before the employer may deduct, under this section, any overpayment
of wages from the employee's wages.
(b) An employer may not deduct from an employee's wages an
amount in dispute under IC 22-2-9-3.
(c) The amount of a wage deduction made by an employer under
subsection (a) is limited to the following:
(1) Except as provided in subdivision (2), the maximum part of
the aggregate disposable earnings of an employee for any work
week that is subjected to an employer deduction for
overpayment may not exceed the lesser of:
(A) twenty-five percent (25%) of the employee's disposable
earnings for that week; or
(B) the amount by which the employee's disposable earnings
for that week exceed thirty (30) times the federal minimum
hourly wage prescribed by 29 U.S.C. 206(a)(1) in effect at
the time the earnings are payable.
In the case of earnings for a pay period other than a week, the
earnings must be computed upon a multiple of the federal
minimum hourly wage equivalent to thirty (30) times the federal
minimum hourly wage as prescribed in this section.
(2) If a single gross wage overpayment is equal to ten (10) times
the employee's gross wages earned due to an inadvertent
misplacement of a decimal point, the entire overpayment may
be deducted immediately.
As added by P.L.215-1995, SEC.1.