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SB-16 Wage garnishment restrictions: exempt earnings: student loans.(2017-2018)

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Date Published: 12/05/2016 08:52 PM
SB16:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 16


Introduced by Senator Wieckowski

December 05, 2016


An act to add Section 706.053 to the Code of Civil Procedure, relating to wage garnishment.


LEGISLATIVE COUNSEL'S DIGEST


SB 16, as introduced, Wieckowski. Wage garnishment restrictions: exempt earnings: student loans.
The Wage Garnishment Law prescribes the procedure for withholding an employee’s earnings for purposes of paying a debt. The law requires that a levy of execution upon the earnings of an employee be made by service of an earnings withholding order upon the employer. An earnings withholding order is issued by a levying officer upon receiving an application submitted by a judgment creditor. An employer is required, except as specified, to withhold the amounts required by an earnings withholding order from all earnings of the employee payable for any pay period of the employee which ends during the withholding period.
The law prohibits the amount of an individual judgment debtor’s weekly disposable earnings subject to levy under an earnings withholding order from exceeding the lesser of 25% of the individual’s weekly disposable earnings or 50% of the amount by which the individual’s disposable earnings for the week exceed 40 times the state minimum hourly wage, or applicable local minimum hourly wage, if higher, in effect at the time the earnings are payable.
This bill would establish a reduced maximum amount of disposable earnings of an individual judgment debtor subject to levy under an earnings withholding order for a judgment based in whole or in part on a claim for debt on a student loan that is not made, insured, or guaranteed by the United States Government pursuant to the Federal Family Education Loan Program or the William D. Ford Federal Direct Loan Program. The bill would prohibit the amount of disposable earnings subject to levy from exceeding the lesser of 15% of the individual’s disposable earnings for that week or 50% of the amount by which the individual’s disposable earnings for the week exceed 40 times the state minimum hourly wage, or applicable local minimum hourly wage, if higher, in effect at the time the earnings are payable.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 706.053 is added to the Code of Civil Procedure, to read:

706.053.
 (a) For a judgment based in whole or in part on a claim for debt from a student loan that is not made, insured, or guaranteed by the United States Government pursuant to the Federal Family Education Loan Program (20 U.S.C. Sec. 1071 et seq.) or the William D. Ford Federal Direct Loan Program (34 C.F.R. 685.100), the maximum amount of disposable earnings of an individual judgment debtor for any workweek that is subject to levy under an earnings withholding order shall not exceed the lesser of the following:
(1) Fifteen percent of the individual’s disposable earnings for that week.
(2) Fifty percent of the amount by which the individual’s disposable earnings for that week exceed 40 times the state minimum hourly wage in effect at the time the earnings are payable. If a judgment debtor works in a location where the local minimum hourly wage is greater than the state minimum hourly wage, the local minimum hourly wage in effect at the time the earnings are payable shall be used for the calculation made pursuant to this paragraph.
(b) For any pay period other than weekly, the following multipliers shall be used to determine the maximum amount of disposable earnings subject to levy under an earnings withholding order that is proportional in effect to the calculation described in paragraph (2) of subdivision (a), except as specified in paragraph (1):
(1) For a daily pay period, the amounts shall be identical to the amounts described in subdivision (a).
(2) For a biweekly pay period, multiply the applicable hourly minimum wage by 80 work hours.
(3) For a semimonthly pay period, multiply the applicable hourly minimum wage by 862/3 work hours.
(4) For a monthly pay period, multiply the applicable hourly minimum wage by 1731/3 work hours.