(a) The notice to an employee required by Section 2 shall be in the following form: "NOTICE OF INTENT TO ASSIGN WAGES
This notice is required by the Illinois Wage Assignment Act. The notice has been sent to tell you that a creditor (name and address listed below) plans to have your wages assigned. A wage assignment is a document you signed at the time you signed the contract for your debt. It authorizes your creditor to receive a portion of your wages directly from your employer, in order to pay your debt. This notice contains important information about the debt and what your options are. You should read the entire notice carefully.
WHY THE CREDITOR WANTS TO ASSIGN YOUR WAGES
You signed a wage assignment on....... (date)....... The wage assignment was signed as security if you failed to make payment on the contract you signed on......... (date) .......... A copy of the wage assignment is attached. The creditor's records show that you have not made a payment since ......... (date)....... and that you now owe $........ on the contract. The creditor will send a demand for wages to your employer 20 days from the date you receive this.
The creditor's name, address, and phone number are:
......................
......................
......................
......................
(Signed by)"
(b) If the wage assignment is revocable under federal law, the notice required under subsection (a) shall also include the following: UNDERSTANDING YOUR CHOICES UNDER THE ILLINOIS WAGE ASSIGNMENT ACT
There are options available to you in this process. You should consider your options and determine the one that is best for you. You have the right to contact an attorney at any point concerning the wage assignment, or to help you determine your best option.
Your options include:
(1) You can stop the wage assignment at any time, which will stop your wages from being deducted. It will not eliminate your debt, and interest may continue to accrue. You may contact your creditor for more information about the interest rate on your contract, and to determine how much interest might accrue if you stop the wage assignment. Your creditor will still be able to pursue other means of collecting any debt you may owe, including filing a lawsuit against you for the full amount owed under the contract and any interest that might accrue. A lawsuit might result in you owing legal fees and other costs. You can stop the wage assignment by filling out the enclosed Revocation Notice Form, or by writing a letter stating that you are revoking the wage assignment. Send the Revocation Notice Form or letter by registered or certified mail to the creditor, at the address listed above. It is highly recommended that you give a copy of the Revocation Notice Form or letter to your employer so your employer can stop any pending payments.
If you choose to write a letter, it should be addressed to the creditor, and should include:
(ii) the account number; and(iii) a statement that you are revoking the wage assignment, such as, "I am revoking the wage assignment." Even if the wage assignment has already begun, you can still stop it now or at any point in the future.
(2) You can do nothing, and allow the wage assignment process to proceed. Starting in 20 days, part of your wages will be sent directly to the creditor to pay off your debt. This will reduce your take-home pay every pay period until the total amount of the debt is repaid. Up to 15% of your wages will be sent to the creditor every pay period. Once the total amount is repaid, the creditor will send a notice to you and to your employer that includes the creditor's name, your name, and the account number, stating that the wage assignment is closed and no further wages should be assigned.
(3) You can contact your creditor to repay the debt, or to explore other options, including a repayment plan or refinancing, if available. You can contact your creditor at the address and phone number listed above. If you agree on another repayment option with your creditor, the creditor will send a notice to your employer stating that your wages should not be assigned.
(c) If the wage assignment is revocable under federal law, the notice required under subsection (b) shall be accompanied by the following Revocation Notice Form, with the relevant information inserted by the creditor: "REVOCATION NOTICE
The employee's name and address are:
......................
......................
......................
......................
The creditor's name and address are:
......................
......................
......................
......................
Re: (insert account number)
I, (insert name), hereby revoke the wage assignment I signed on (insert date the wage assignment was signed). You no longer have my permission to use this wage assignment.
..................... .......................
(Signed by) (Date)"
Amended by P.A. 099-0903,§ 5, eff. 1/1/2017.As an expert in legal matters and employment law, I can provide comprehensive insights into the concepts and regulations presented in the provided article related to the Illinois Wage Assignment Act. My expertise is grounded in a thorough understanding of legal documentation, employment relationships, and relevant federal laws that govern such matters.
The Illinois Wage Assignment Act, as outlined in the article, is a legal framework that addresses the assignment of wages for the repayment of debts. Here are key concepts and information related to the provisions described:
Section 2 - Notice to Employee
1. Purpose of Notice:
- The notice informs the employee about the intent to assign wages under the Illinois Wage Assignment Act.
- It is a legal requirement for creditors to provide this notice to the employee.
2. Content of the Notice:
- Specifies that the notice is in compliance with the Illinois Wage Assignment Act.
- Identifies the creditor's name, address, and their intention to assign wages.
3. Wage Assignment Background:
- Describes the wage assignment as a contractual agreement signed by the employee to secure debt repayment.
- Highlights the creditor's right to receive a portion of the employee's wages directly from the employer.
4. Debt Information:
- Provides details about the debt, including the date the wage assignment was signed, the contract date, and the outstanding debt amount.
5. Action Timeline:
- Specifies that a demand for wages will be sent to the employer 20 days from the date the employee receives the notice.
Section 2(b) - Revocable Wage Assignments
1. Revocable Wage Assignments:
- Addresses cases where the wage assignment is revocable under federal law.
2. Understanding Choices:
- Informs the employee of available options under the Illinois Wage Assignment Act.
3. Options for the Employee:
- Provides three options for the employee to consider, including stopping the wage assignment, allowing it to proceed, or contacting the creditor to explore alternatives.
4. Stopping the Wage Assignment:
- Explains the process of stopping the wage assignment and the consequences, such as potential legal action and accrued interest.
5. Doing Nothing:
- Explains the consequences of allowing the wage assignment to proceed, including the deduction of wages until the debt is repaid.
6. Contacting the Creditor:
- Encourages the employee to contact the creditor to discuss repayment options or alternatives.
Section 2(c) - Revocation Notice Form
1. Revocation Notice Form:
- Specifies the content of the Revocation Notice Form to be used if the wage assignment is revocable under federal law.
2. Required Information:
- Outlines the necessary details to be included in the Revocation Notice Form, such as employee and creditor information, and the date of revocation.
3. Submission Process:
- Instructs the employee to send the Revocation Notice Form by registered or certified mail to the creditor.
Legal References:
- Refers to legal citations, such as "740 ILCS 170/2.2" and mentions amendments by P.A. 83-867 and P.A. 099-0903.
This analysis demonstrates a comprehensive understanding of the Illinois Wage Assignment Act, including its legal requirements, employee options, and the procedures involved in revoking a wage assignment. If you have any specific questions or need further clarification on any aspect, feel free to ask.
FAQs
It authorizes your creditor to receive a portion of your wages directly from your employer, in order to pay your debt. This notice contains important information about the debt and what your options are. You should read the entire notice carefully.
What is a notice of intent to assign wages in Illinois? ›
This notice is required by the Illinois Wage Assignment Act. The notice has been sent to tell you that a creditor (name and address listed below) plans to have your wages assigned. A wage assignment is a document you signed at the time you signed the contract for your debt.
What does revoking a wage assignment mean? ›
A wage assignment is where you ask your employer to subtract a certain amount from your wages so you can make payments to a third party or creditor. If you no longer want your creditor to use the wage assignment, you need to send him a Revoke Wage Assignment Letter.
How do I write a revoke wage assignment letter? ›
If you choose to write a letter, it should be addressed to the creditor, and should include: (i) your name; (ii) the account number; and (iii) a statement that you are revoking the wage assignment, such as, "I am revoking the wage assignment."
What is the difference between wage assignment and garnishment? ›
A wage assignment is a voluntary agreement between the employee and creditor where an amount is withheld from the employee's paycheck to satisfy a debt owed to a third-party recipient, whereas under a wage garnishment, the amount withheld from the employee's check is typically obtained through a court order initiated ...
How do I stop a wage garnishment in Illinois? ›
One of the most common forms of defense is to file for an Illinois Chapter 7 or Chapter 13 bankruptcy. Once you file a bankruptcy petition and the required forms in court, the judge will issue an automatic stay that forbids your creditors from contacting you or taking any other action to try to collect on the debt.
How do I revoke a wage assignment in Illinois? ›
Stopping a Wage Assignment
You can stop a wage assignment at any time for any reason. If you don't want the deduction to happen, write a letter to your employer and creditor stating you are canceling the wage assignment. Remember, you will still owe the money. The creditor can use other methods to collect it.
Can an employer change your pay without notice Illinois? ›
Under the IWPCA, 820 ILCS 115/10, an employer cannot change an employee's rate of compensation or rate of pay without first notifying the employee before the effective date of the change.
Can I sue my employer for not paying me on time Illinois? ›
Filing a Lawsuit
If your employer failed to pay you all of the wages you are owed, you can file a wage claim with the Illinois Labor Department. The Illinois Labor Department allows you to file a wage claim online.
What is an example of wage assignment? ›
Wage assignment is the act of taking money directly from an employee's paycheck in order to pay back a debt obligation. Such an automatic withholding plan may be used to pay back a variety of debt obligations, including back taxes, defaulted student loan debt, and both child and spousal support payments.
Limitations on the Amount of Earnings that may be Garnished (General)
| Weekly | Biweekly | Monthly |
|---|
| $290.00 or more: MAXIMUM 25% | $580.00 or more: MAXIMUM 25% | $1,256.66 or more: MAXIMUM 25% |
2 more rowsThe law specifically states:LABOR CODE SECTION 300(e) An assignment of wages to be earned is revocable at any time by the maker thereof. Any power of attorney to assign or collect wages or salary is revocable at any time by the maker thereof.
Does an employer have to honor a wage assignment in Illinois? ›
This development is important for multistate employers because Illinois is the only state with a statute that clearly and unequivocally provides that employers must honor contracts employees make with third parties to assign wages. Under the Illinois Wage Assignment Act, 740 ILCS §§170/.
Can my wages be garnished in Texas? ›
In Texas, wage garnishment is prohibited by the Texas Constitution except for a few kinds of debt: child support, spousal support, student loans, or unpaid taxes. A debt collector cannot garnish your wages for ordinary debts. However, Texas does allow for a bank account to be frozen.
How do I stop a payday loan garnishment? ›
If you are having the payday loan money automatically deducted from your bank account, ask the bank to stop the automatic deduction. You might be able to stop payment on the check, close your bank account, and reopen a new bank account. Contact a lawyer to discuss this option before trying this.
What is Illinois wage assignment law? ›
Starting a Wage Assignment. You must be at least 40 days behind on your loan before the creditor can have your employer start taking money out of your paycheck. First, the creditor must mail you and your employer a Notice of Intent to Assign Wages 20 days before they can make the demand.
What is the wage Act in Illinois? ›
The Wage Payment and Collection Act establishes when, where and how often wages must be paid and prohibits deductions from wages or final compensation without the employee's consent.
Does an employer have to honor a wage assignment Illinois? ›
This development is important for multistate employers because Illinois is the only state with a statute that clearly and unequivocally provides that employers must honor contracts employees make with third parties to assign wages. Under the Illinois Wage Assignment Act, 740 ILCS §§170/.
What is the Illinois Equal wage Act? ›
The Equal Pay Act prohibits employers with four or more employees from paying unequal wages to men and women for doing the same or substantially similar work, except if the wage difference is based upon a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or factors ...
