29 C.F.R. § 531.40

Payments to employee's assignee

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(a) Where an employer is directed by a voluntary assignment or order of his employee to pay a sum for the benefit of the employee to a creditor, donee, or other third party, deduction from wages of the actual sum so paid is not prohibited: Provided, That neither the employer nor any person acting in his behalf or interest, directly or indirectly, derives any profit or benefit from the transaction. In such case, payment to the third person for the benefit and credit of the employee will be considered equivalent, for purposes of the Act, to payment to the employee.

(b) No payment by the employer to a third party will be recognized as a valid payment of compensation required under the Act where it appears that such payment was part of a plan or arrangement to evade or circumvent the requirements of section 3(m) or subpart B of this part. For the protection of both employer and employee it is suggested that full and adequate record of all assignments and orders be kept and preserved and that provisions of the applicable State law with respect to signing, sealing, witnessing, and delivery be observed.

(c) Under the principles stated in paragraphs (a) and (b) of this section, employers have been permitted to treat as payments to employees for purposes of the Act sums paid at the employees' direction to third persons for the following purposes: Sums paid, as authorized by the employee, for the purchase in his behalf of U.S. savings stamps or U.S. savings bonds; union dues paid pursuant to a collective bargaining agreement with bona fide representatives of the employees and as permitted by law; employees' store accounts with merchants wholly independent of the employer; insurance premiums (paid to independent insurance companies where the employer is under no obligation to supply the insurance and derives, directly or indirectly, no benefit or profit from it); voluntary contributions to churches and charitable, fraternal, athletic, and social organizations, or societies from which the employer receives no profit or benefit directly or indirectly.

Notes of Decisions

Cited in 6 cases (1 in the last 5 years), 1971–2025 · leading case: Crispin Calderon, on Behalf of Themselves & All Others Similarly Situated v. Jim Witvoet, Sr., Doing Bus. as J & B Vegetables, 999 F.2d 1101 (7th Cir. 1993).

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Crispin Calderon, on Behalf of Themselves & All Others Similarly Situated v. Jim Witvoet, Sr., Doing Bus. as J & B Vegetables, 999 F.2d 1101 (7th Cir. 1993). “2d at 1369 ; 29 C.F.R. § 531.40 . A revocable power to appoint one’s income to a designated party is the functional equivalent of cash.”

Peter J. Brennan, Sec'y of Labor, United States Dep't of Labor v. Vets. Cleaning Serv., Inc., 482 F.2d 1362 (5th Cir. 1973). “29 C.F.R. § 531.40 (a). The quoted portion of the regulation permits deductions at the direction of the employee to pay a third party, but only where the employer does not benefit from the transaction.”

Martinez v. Deaf Smith Cnty. Grain Processors, Inc., 583 F. Supp. 1200 (N.D. Tex. 1984). “29 CFR § 531.40 (1981). While it seems remarkable that Skiles, who speaks little Spanish, and Plaintiff, who speaks little English, reached a voluntary assignment of the first month’s wages, Plaintiff never testified that the payment was involuntary or presented any evidence…”

Futrell v. Columbia Club, Inc., 338 F. Supp. 566 (S.D. Ind. 1971). “29 CFR § 531.40 ; Opinion Letter No. 604, May 22, 1967.”

Marshall v. Quik-Trip Corp., 672 F.2d 801 (10th Cir. 1982). “29 CFR § 531.40 (a) (1981), 32 Fed.Reg. 13575, September 28, 1967; accord, Brennan v.”

Kerl v. United States (Fed. Cl. 2025). “” 29 C.F.R. § 531.40 (a). The latter regulation even cautions that “[f]or the protection of both employer and employee it is suggested that full and adequate record of all assignments and orders be kept and preserved and that provisions of the applicable State law with respect…”

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.