On March 13, 2018, the Oklahoma Senate passed SB 559, a bill that would expand protections from retaliatory discharge for employees who are subject to multiple wage garnishment orders arising from personal debts. Although federal and state laws already ban employers from firing an employee due to a single wage garnishment order, the Senate’s bill would eliminate an existing exemption for employees with multiple orders. The bill is currently awaiting approval from the Oklahoma House of Representatives.
Wage garnishment is a common tool for enforcing a civil judgment issued by an Oklahoma court against a defendant who owes money to the plaintiff. A garnishment order directs the defendant’s employer, who is effectively a third party holding the defendant’s property-their wages-to turn over those funds to the plaintiff or their representative. Garnishment orders may also be issued against a defendant’s bank or any other institution holding their property.
Oklahoma follows the federal Consumer Credit Protection Act (CCPA) with respect to limits on wage garnishment. The CCPA states an employer cannot be required to withhold more than 25 percent of an employee’s “disposable earnings” to comply with a garnishment order. (This limit does not apply to tax debts or unpaid child support.) Disposable earnings refers to an employee’s net wages less any legally permitted deductions, such as federal income tax withholding or Oklahoma unemployment insurance taxes.
The CCPA further states no employer “may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness.” Similarly, Oklahoma law currently protects employees under garnishment from retaliatory discharge, unless “the employer shall be served with garnishment or like process issued to collect one or more judgments against the employee on more than two occasions within one year.”
SB 559 would eliminate this language from state law. The amended law would instead simply ban retaliatory discharge without any qualifications. According to Oklahoma City employment law and business litigation attorney, Tony Gould, this would be a major victory for employees facing multiple creditor judgments. “Oklahoma business owners already need to be careful when firing or refusing to hire someone based on an existing garnishment order. The legislature appears to be moving in the direction of expanding, rather than limiting, protections for such workers. So while employers may view complying with multiple garnishment orders as an inconvenience, it is in fact a necessary cost of doing business, and attempting to circumvent the law in this area may end up being even more costly.”
SB 559, which was initially proposed by Senate Democratic Leader John Sparks and Republican State Rep. Leslie Osborn, passed the Senate by a bipartisan vote of 37-7. On April 10, 2018, the House Banking and Business Committee recommended the full House agree to the Senate without further amendment. If adopted, the amended law would take effect on July 1, 2018.
Release ID: 349947