Assignment of wages and salaries

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In banking, the assignment of wages and salaries is an assignment of security for claims for remuneration from the borrower to credit institutions as security for loans in bulk business .

General

The transfer of wages and salaries from employment and service relationships is often the only means of securing consumer credits , in addition to the transfer of ownership of property and the transfer of ownership of motor vehicles . The guarantee is also used as a security instrument. A wage and salary assignment is the most important means of security for workers , employees and civil servants . While savings banks and cooperative banks agree on wage assignments in two thirds of all cases, at all other credit institutions the proportion is 80% and more. It is one of the physical security items in which the bank customer's employer acts as a third party debtor . A wage and salary assignment serves as security for the lender in the case of consumer loans , overdraft facilities or installment loans . You must individually to the guarantor be tailored to the specific conditions applicable to him seizure free allowances to be considered. These exemption limits are to be deducted from the nominal value of the claims when assessing the security of a wage and salary assignment.

history

A law of June 1869 in Germany prohibited the assignment of wages. It was in effect until October 1934, when a foreclosure law made assignment bans in employment contracts possible. In June 1927, the “Law on the Assignment of Civil Servants' Remuneration to Building a Home” came into force, which applied in particular to the Civil Servants Home Office (BHW) and even allowed assignments beyond otherwise existing seizure limits. The BHW was recognized as the only salary assignment office within the meaning of Section 2 of this law. In 1976, applications from state building societies for approval as an assignment agency were rejected by the responsible Federal Ministry. In December 1956, the Federal Court of Justice confirmed the admissibility of the ban on assignment of wage claims, but did not allow a tacit assignment ban even in large companies . He considered an employee's interest to be worthy of protection, to provide a creditor with security for a claim by assigning his entitlement to his earned wages and thus to avoid garnishment of wages associated with avoidable costs. Since November 1975, the BGH has held the advance assignment of future wage, salary, commission and social benefit claims to be fundamentally permissible. In June 1989 it first made it clear when and under what conditions wage assignment clauses are effective. In particular, the requirements and the notification of the notification of assignment to the employer must be clearly regulated. The creditworthiness of the borrower can be called into question by the disclosure of a silent assignment, because it signals the non-fulfillment of an existing liability to third parties and raises doubts about the loyalty of the borrower to the contract or his economic performance.

Legal issues

Assignment Agreement

An assignment agreement is required so that wages and salaries can serve as collateral. It is a security agreement that can be concluded separately or as part of the loan agreement. In consumer credit agreements, a wage assignment clause is a common security measure, even if the loan is used to finance a specific item.

Content of the contract

The wage assignment is subject to a form- free security agreement between the employee (assignor and guarantor ) and the lending bank (the assignee and the protection buyer ) as the acquirer of the claim ( § 398 clause 1 BGB ). The assignment right of the BGB applies analogously to this assignment of security , so that all ancillary rights according to § 401 BGB pass to the security buyer. Wages and salaries are only assigned to the bank as security so that the employee can continue to use them. The assignor must be the owner of the wage claim and be authorized to dispose of it. The employer's consent is not required under civil law, but under banking supervisory law Art. 212 Capital Adequacy Ordinance (CRR) requires an open assignment confirmed by the employer so that this credit security can be recognized as a "credit risk mitigation technique" and leads to lower capital requirements for banks . Waive the banks first of this disclosure, the secured loan is considered formally as unsecured loans . In the case of a silent, undisclosed assignment, the assignor has an urgent interest worthy of protection in being notified in good time before the disclosure and confiscation. A disclosure in the event of late payment may only be made after at least two suspensions with the due debt service . In accordance with the contract, the assignor only loses his power of disposal over wages or salaries in this security case. Then the credit institutions are entitled to assert the attachable part after disclosure of the assignment to the employer (if not already done) and to request a transfer to themselves ( § 409 BGB). The assignee must then accept all objections that the employer has towards the employee, including against himself ( Section 404 BGB; limitation period , reduction in salary, etc.). As collateral documents are wage and salary slips or income tax assessments and confirmed by the employer notice of assignment in question.

Types of Claims and Third Party Debtors

All future claims to wages or salaries can be the object of an assignment of security, also pension payments and ALG I ( § 53 Abs. 2 Nr. 1 SGB ​​I ) are assignable. As employers are companies or agencies of the government in question. In the case of the latter, according to the so-called fiscal privilege of Section 411 BGB, a certified notification of assignment to the authority is required for the assignment to be effective . An advance assignment is only permitted if the assigned claim is sufficiently determined or determinable. In the case of wage and salary assignments, this requires, in particular, the exact description of the earned income (wages, salaries, remuneration, other remuneration) and the employer. If the employer has made several assignments of wages and salaries by various assignees, the assignment that was effectively assigned first will be served as the first assignment (ranking according to chronological priority). Any assignment justified later only comes into play when the oldest disclosed assignment of wages or salaries no longer exists.

scope

The scope of the wage or salary assignment is limited to the attachable part of the labor income ( § 400 BGB), therefore the attachment exemption limits in the attachment table of § 850c ZPO must be observed. In particular, the child-raising and maternity allowance in accordance with Section 54 (3) SGB I cannot be seized - and thus not assignable . In addition, the following earmarked earnings are not assignable in accordance with Sections 850a and 850b ZPO:

Assignment prohibitions can be in the employment contract , in works agreements or in collective agreements ; a wage and salary assignment is then not possible ( § 399 BGB). In employment contracts it can be agreed that an assignment of claims from the employment relationship is only possible with the consent of the employer. The employee must then first obtain the consent of his employer before he transfers wages and salaries to his bank. The priority of wage and salary assignments within the scope of the discharge of residual debt according to § 114 InsO a. F. has lapsed since July 2014, so that these assignments become ineffective when insolvency proceedings are opened. This means that they are no longer insolvency-proof, which significantly limits their suitability as loan collateral. According to § 114 InsO a. F. Wage and salary assignments remained effective for two years during the bankruptcy proceedings. Wage and salary assignments are also subject to the risk of unemployment , so that they end upon termination .

According to Art. 209 Para. 3d Capital Adequacy Ordinance (English abbreviation CRR), claims from addresses, subsidiaries and employees associated with the borrower are not recognized as collateral. So if a company is granted a loan and at the same time a consumer loan with wages and salaries is made available as collateral for an employee of the company , the latter cannot be recognized as a credit risk reduction technique.

International

Austria, Switzerland and Liechtenstein

In Austria and Liechtenstein there is a complete statutory ban on assignment of wages and salaries. This is governed by the respective consumer protection laws (Consumer Protection Act), and that, since March 1979 Consumer Protection Act of Austria (Art. 12 para. 1 KSchG) and since October 2002 in Liechtenstein (Art. 16 para. 1 KSchG). In Switzerland , the assignment and pledging of future wage claims is even null and void ( Art. 325 (2 ) OR ). This is to protect the employee against granting third parties direct access to his wages.

Canada and USA

In several Canadian provinces (such as in Saskatchewan and Alberta ) are available with the Wage Assignment Act of 1972 and in 1974 even a specific law, the salary assignments for consumer loans ( English Consumer credits ) controls. However, existing laws under the same name in some US states (such as Illinois ) include garnishment of wages if employees fail to service their debts.

Individual evidence

  1. ↑ Dietrich Boewer, Handbook of Garnishment and Assignment of Wages, 2015, p. 379.
  2. ^ Knut Holzscheck / Günter Hörmann / Jürgen Daviter, Die Praxis des Konsumentenkredits , 1982, p. 133.
  3. ↑ Klaus Lodigkeit, The development of the ban on assignment of claims up to § 354a HGB , 2004, p. 231 FN 607.
  4. ↑ Klaus Lodigkeit, The development of the ban on assignment of claims up to § 354a HGB , 2004, p. 170.
  5. ↑ Th. R. Kohlhase, The development of building society savings in Germany in the period between 1949 and 1990 , dissertation Univ. Cologne 2011, p. 255.
  6. ^ BGH, judgment of December 20, 1956, Az .: VII ZR 279/56
  7. ^ BGH, judgment of November 24, 1975, Az .: III ZR 81/73
  8. ↑ a b BGH, judgment of June 22, 1989, Az. III ZR 72/88
  9. ↑ OLG Frankfurt, NJW 1986, 2712, 2713
  10. ↑ BGH NJW 1987, 1703
  11. ↑ BGH NJW-RR 2012, 1130
  12. ↑ BGH NJW 1982, 2626
  13. ↑ BGHZ 7, 365, 367
  14. ^ Miles Goode, Royston Consumer Credit , 1978, p. 208.
  15. ↑ Maynard G. Sautter, Employment in Illinois , 2012, § 4-7: Wage Assignments