In our prior blog ("Has your Employer Fired You because of a Wage Garnishment/Income Execution..."), we discussed your statutory right to damages should your employer retaliate against you for its receipt of an income execution. Under this New York State statute (CPLR § 5252), you may sue your employer for up to 6 weeks of lost pay and potential reinstatement of your job.
This blog introduces the federal corollary of CPLR § 5252 contained within the Consumer Credit Protection Act ("CCPA" - 15 U.S.C. §§ 1671-1677), enacted in 1970 as a means to prevent widespread bankruptcy and hardship.
Although the "preservation of an employee's job is one of the dominant purposes of the CCPA garnishment protections," the protections apply only to garnishment of one debt.[1] In other words, the CCPA permits an employee firing due to multiple garnishment orders for different debts. New York CPLR § 5252 prohibits any adverse action against an employee because of one or more wage garnishments so it affords more protection.
Although the Secretary of Labor has the authority to enforce the CCPA, this federal Act is devoid of a private cause of action – meaning you can't sue on your own behalf for reinstatement or damages. As stated, New York does have a private cause of action allowing you to sue for up six weeks of lost wages and/or reinstatement.
Under the CCPA, what an aggrieved employee may consider, however, is bringing a Title VII Civil Rights action, which prohibits employment discrimination based on race or other certain characteristics. Employees in some cases have shown that firings relating to wage garnishments had a "disparate impact" on minorities forming the basis for a Title VII claim. If you wish to go this route, make sure you consult an employment discrimination attorney immediately to ascertain the short statute of limitations period in which to file such a claim.
The CCPA protections generally do not apply to actions to collect state or federal taxes,[2] but the "job protection" provision of the CCPA does apply to an Internal Revenue Service levy on wages.[3] Also, the CCPA garnishment protections do apply to debts incurred for business purposes – not just consumer purposes. Some courts further extend the protections of the CCPA to independent contractors, not just wage earning employees. Independent contractors would be wise to first seek protection under state garnishment protection statutes.