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S.B. 131






Chief Sponsor: Wayne L. Niederhauser

House Sponsor: David Clark

             8      LONG TITLE
             9      General Description:
             10          This bill modifies provisions related to the payment of wages to address when wages
             11      can be withheld or diverted.
             12      Highlighted Provisions:
             13          This bill:
             14          .    permits the automatic withholding of wages as a contribution to a retirement plan if
             15      certain conditions are met; and
             16          .    makes technical and conforming changes.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          34-28-3, as last amended by Laws of Utah 1998, Chapter 395
             25      Be it enacted by the Legislature of the state of Utah:
             26          Section 1. Section 34-28-3 is amended to read:
             27           34-28-3. Regular paydays -- Currency or negotiable checks required -- Deposit in

             28      financial institution -- Statement of total deductions -- Unlawful withholding or diversion
             29      of wages.
             30          (1) (a) An employer shall pay the wages earned by an employee at regular intervals, but
             31      in periods no longer than semimonthly on days to be designated in advance by the employer as
             32      the regular payday.
             33          (b) An employer shall pay for services rendered during [each] a pay period within ten
             34      days after the close of that pay period.
             35          (c) If a payday falls on a Saturday, Sunday, or legal holiday, an employer shall pay
             36      wages earned during the pay period on the day preceding the Saturday, Sunday, or legal
             37      holiday.
             38          (d) If an employer hires [employees] an employee on a yearly salary basis, the
             39      employer may pay [an] the employee on a monthly basis by paying on or before the seventh of
             40      the month following the month for which services [were] are rendered.
             41          (e) [All wages] Wages shall be paid in full to [the] an employee:
             42          (i) in lawful money of the United States;
             43          (ii) by [checks or drafts] a check or draft on a depository institution, as defined in
             44      Section 7-1-103 , that is convertible into cash on demand at full face value; or
             45          (iii) by electronic transfer to the depository institution designated by the employee.
             46          (2) [A person, firm, corporation, agent, or officer] An employer may not issue in
             47      payment of wages due or as an advance on wages to be earned for services performed or to be
             48      performed within this state [any] an order, check, or draft unless:
             49          (a) it is negotiable and payable in cash, on demand, without discount, at a depository
             50      institution; and
             51          (b) the name and address of the depository institution appears on the instrument.
             52          (3) (a) Except as provided in Subsection (3)(b), an employee may refuse to have the
             53      employee's wages deposited by electronic transfer under Subsection (1)(e)(iii) by filing a
             54      written request with the employer.
             55          (b) An employee may not refuse to have the employee's wages deposited by electronic
             56      transfer under Subsection (3)(a) if:
             57          (i) for the calendar year preceding the [pay-period] pay period for which the employee
             58      is being paid, the employer's federal employment tax deposits [were] are equal to or in excess

             59      of $250,000; and
             60          (ii) at least two-thirds of the employees of the employer have their wages deposited by
             61      electronic transfer.
             62          (c) An employer may not designate a particular depository institution for the exclusive
             63      payment or deposit of a check or draft for wages.
             64          (4) If [any] a deduction is made from the wages paid, the employer shall, on each
             65      regular payday, furnish the employee with a statement showing the total amount of each
             66      deduction.
             67          (5) [It is unlawful for an] An employer [to] may not withhold or divert part of an
             68      employee's wages unless:
             69          (a) the employer is required to withhold or divert the wages by:
             70          (i) court order; or
             71          (ii) state or federal law;
             72          (b) the employee expressly authorizes the deduction in writing; [or]
             73          (c) the employer presents evidence that in the opinion of [the] a hearing officer or [the]
             74      an administrative law judge would warrant an offset[.]; or
             75          (d) subject to Subsection (7), the employer withholds or diverts the wages:
             76          (i) as a contribution of the employee under a contract or plan that is;
             77          (A) described in Section 401(k), 403(b), 408, 408A, or 457, Internal Revenue Code;
             78      and
             79          (B) established by the employer; and
             80          (ii) the contract or plan described in Subsection (5)(d)(i) provides that an employee's
             81      compensation is reduced by a specified contribution:
             82          (A) under the contract or plan; and
             83          (B) that is made for the employee unless the employee affirmatively elects:
             84          (I) to not have a reduction made as a contribution by the employee under the contract
             85      or plan; or
             86          (II) to have a different amount be contributed by the employee under the contract or
             87      plan.
             88          (6) [It is unlawful for an employer to] An employer may not require an employee to
             89      rebate, refund, offset, or return [any] a part of the wage, salary, or compensation to be paid to

             90      the employee except as provided in Subsection (5).
             91          (7) (a) An employer shall notify an employee in writing of the right to make an election
             92      under Subsection (5)(d).
             93          (b) An employee may make an election described in Subsection (5)(d) at any time by
             94      providing the employer written notice of the election.
             95          (c) An employer shall modify or terminate the withholding or diversion described in
             96      Subsection (5)(d) beginning with a pay period that begins no later than 30 days following the
             97      day on which the employee provides the employer the written notice described in Subsection
             98      (7)(b).
             99          [(7)] (8) An employer is not prohibited from pursuing legitimate claims of damages,
             100      offsets, or recoupments in a civil action against an employee.

Legislative Review Note
    as of 1-14-08 2:01 PM

Office of Legislative Research and General Counsel

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