Indiana recently updated its wage deduction statute (Indiana Code 22-2-6-2). Our partner Crystal Wildeman referenced this update in her recent post.
In Indiana, as in several States, voluntary wage deductions must comply with statutory requirements. If an employee sues to recoup the amount withheld, failure to comply with all applicable wage deduction requirements may result in employer liability for the amount withheld, additional penalties, and/or an award of the employee’s attorneys’ fees.
At the end of this post is a sample authorization form that illustrates one potential way to simplify the process of entering into wage deduction arrangements with Indiana employees.
Please keep in mind that several States have unique wage deduction laws regulating the process for making wage deductions, the reasons deductions may be made, and employer liability for failing to follow the law. Consequently, the attached sample form would not be appropriate for employees outside Indiana. Further, there are situations where federal law takes precedence such that employers do not have to follow Indiana law (this might occur, for example, in the area of union dues or in connection with certain ERISA plans).
If you have questions about a proposed deduction from the wages of an Indiana employee, or if you need to address wage deductions for employees in States other than Indiana, our labor and employment team would be happy to help.
A sample authorization form follows. This sample is not a substitute for understanding Indiana Code 22-2-6 and how that statute may impact use of the sample.
(This post and the attached sample are not legal advice. Consider consulting with a lawyer about specific situations.)