Legal Definitions - wage assignment

Wage assignment refers to a legal arrangement where an employee'semployer is directed to deduct a specific portion of the employee's earnings and pay it directly to a third party. This deduction is made before the employee receives their paycheck. Wage assignments can be voluntary, where an employee agrees to have deductions made to repay a loan or contribute to a specific fund, or involuntary, where a court or government agency orders the employer to withhold wages to satisfy a debt, such as child support or unpaid taxes.

• Example 1: Voluntary Loan Repayment
  Sarah takes out a personal loan from her credit union. As part of the loan agreement, she authorizes her employer to deduct $100 from each bi-weekly paycheck and send it directly to the credit union to cover her loan payments. This ensures her payments are made on time without her having to remember to send them manually.

  This illustrates a wage assignment because Sarah has voluntarily agreed to have a portion of her wages deducted by her employer and paid directly to a third party (the credit union) to fulfill a financial obligation (her loan).

• Example 2: Court-Ordered Child Support
  Following a divorce, a family court issues an order requiring Mark's employer to withhold $500 from his monthly salary and send it directly to his ex-spouse for child support. Mark's employer receives this order and adjusts his payroll accordingly, ensuring the child support payments are consistently made.

  This is an example of an involuntary wage assignment. A court has legally mandated that Mark's employer deduct a specific amount from his wages and pay it to a third party (his ex-spouse) to satisfy a legal obligation (child support).

• Example 3: Unpaid Tax Levy
  After failing to pay several years of federal income taxes, the Internal Revenue Service (IRS) issues a wage levy to David's employer. The levy instructs the employer to deduct a certain percentage of David's disposable earnings from each paycheck and remit it directly to the IRS until his outstanding tax debt is satisfied.

  This demonstrates an involuntary wage assignment because a government agency (the IRS) has compelled David's employer to withhold a portion of his wages and send it to the agency to settle a debt (unpaid taxes), without David's direct consent.