Note: This version of section amended by P.L.104-2026, SEC.22. See also following version of this section amended by P.L.115-2026, SEC.14.
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 in shares of stock, 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, goods, or food offered by the employer and sold to the employee, for the employee's benefit, use, or consumption, 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) The purchase, rental, or use of uniforms, shirts, pants, or other job related clothing at an amount not to exceed the direct cost paid by an employer to an external vendor for those items.
(15) The purchase of equipment or tools necessary to fulfill the duties of employment at an amount not to exceed the direct cost paid by an employer to an external vendor for those items.
(16) Reimbursement for education or employee skills training. However, a wage assignment may not be made if the education or employee skills training benefits were provided, in whole or in part, through an economic development incentive from any federal, state, or local program.
(17) An advance for:
(A) payroll; or
(B) vacation;
pay.
(18) The employee's drug education and addiction treatment services under IC 12-23-23.
(19) Voluntary contributions of the employee to a federal tax deferred retirement account for employees of a political subdivision provided the account:
(A) is in the name of the employee;
(B) is under the direction and control of the employee; and
(C) immediately vests with the employee.
(c) The interest rate charged on amounts loaned or advanced to an employee and repaid under subsection (b) may not exceed the bank prime loan interest rate as reported by the Board of Governors of the Federal Reserve System or any successor rate, plus four percent (4%).
(d) The total amount of wages subject to assignment under subsection (b)(14) and (b)(15) may not exceed the lesser of:
(1) two thousand five hundred dollars ($2,500) per year; or
(2) five percent (5%) of the employee's weekly disposable earnings (as defined in IC 24-4.5-5-105(1)(a)).
(e) Except as provided under 29 CFR Parts 1910, 1915, 1917, 1918, and 1926, an employee shall not be charged or subject to a wage assignment under subsection (b)(14) or (b)(15) for protective equipment including personal protective equipment identified under 29 CFR Parts 1910, 1915, 1917, 1918, and 1926.
(f) A wage assignment may be made for the purpose of paying voluntary contributions described in subsection (b)(19) without meeting the conditions set forth in subsection (a). An employee may opt out of a wage assignment under this subsection at any time by providing written notice to the employer.
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; P.L.193-2015, SEC.2; P.L.136-2018, SEC.110; P.L.195-2018, SEC.10; P.L.147-2019, SEC.1; P.L.104-2026, SEC.22.
