An assignment of wages is the transfer of the right to collect wages from the wage earner to a creditor. The assignment of wages is usually effectuated by deducting from an employee's earnings the amount necessary to pay off a debt.
An assignment of wages should be contained in a separate written instrument, signed by the person who has earned or will earn the wages or salary. The assignment should include statements identifying the transaction to which the assignment relates, the personal status of the assignor, and a recital, where appropriate, that no other assignment or order exists in connection with the same transaction.
Many jurisdictions have enacted statutory provisions concerning wage assignments that prescribe various requisites of or conditions to the validity of assignments of wages. Compliance with these statutes is essential to make such assignments effective.
In the state of Vermont, an Assignment of Wages Due or to Become Due refers to a legal agreement through which an employee assigns or transfers the right to receive a specific portion of their wages to a designated party, typically to fulfill a debt or obligation. This arrangement allows creditors or lenders to have a legal claim on the employee's wages until the assigned amount is paid off. There are two main types of Vermont Assignment of Wages Due or to Become Due: 1. Voluntary Assignment: This type of assignment occurs when an employee willingly transfers a portion of their wages to a creditor or lender. It is typically made voluntarily to address an outstanding debt or financial obligation. Voluntary assignments are legally binding and require both the employee and the assignee to sign an agreement outlining the terms and conditions of the assignment. 2. Involuntary Assignment: In some cases, a creditor or lender may obtain a court order, known as a wage assignment order, which allows them to collect a portion of an employee's wages directly from their employer. This type of assignment is involuntary in nature and is typically initiated when a debtor defaults on their payments or fails to fulfill their financial obligations. Involuntary assignments are legally enforceable and placing a legal obligation on the employer to deduct and remit the designated amount from the employee's wages. It's important to note that Vermont law imposes certain limitations on the amount that can be assigned from an employee's wages. According to the Vermont Statutes Title 9, Section 3474, creditors cannot assign more than 15% of an individual's disposable earnings or the amount by which an individual's disposable earnings exceed 45 times the state or federal minimum wage, whichever is greater. Disposable earnings refer to the employee's wages after deducting federal, state, and local taxes, as well as any other required deductions. In conclusion, a Vermont Assignment of Wages Due or to Become Due is a legal mechanism that allows creditors or lenders to claim a portion of an employee's wages to satisfy an outstanding debt. It can be either voluntarily entered into by the employee or involuntarily enforced through a court order. However, there are legal protections in place to prevent excessive wage assignments and ensure that employees retain a minimum level of income to meet their basic needs.
