Under New York's Exempt Income Protection Act ("EIPA"), certain funds in deposit accounts are exempt from most restraining notices and levies. One exemption under the EIPA is for an amount deemed to be protected wages, with the amount of such exemption tied to the minimum wage. As a result of an increase in the New York State minimum wage that takes effect on December 31, 2022, the amount of the wage exemption under the EIPA will increase as of that date in certain parts of the State.
The EIPA took effect in 2009 and, among other things, requires financial institutions to exempt certain funds in deposit accounts from the reach of creditors seeking to restrain or levy on those accounts. There are two exemptions under the EIPA: (1) for wages; and (2) for the direct deposit or electronic payment of amounts "reasonably identifiable as statutorily exempt" funds during the 45-day period preceding the service of the restraining notice or levy.
Under the wage exemption, a financial institution must make a certain amount available to the depositor based on the amount of the federal or New York State minimum wage (whichever is higher). Because the New York State minimum wage will increase on December 31, 2022 for certain areas of New York State, the amount of the wage exemption under the EIPA will also increase as of that date in those areas. Under legislation signed into law in 2016, the minimum wage in New York State now varies depending on the location in New York State where the...
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