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American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
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CCH® PAYROLL — 3/7/08

State law requiring consent prior to withholding for benefits preempted

ERISA preempts a state law requiring employees' written consent prior to withholding wages for welfare benefits, according to an Employee Benefits Security Administration (EBSA) advisory opinion.

A nationwide employer offered its employees benefits through a cafeteria plan. Default benefits were provided to any employee who failed to make a medical coverage election and did not certify that he or she had medical coverage from another source. Employees were notified of all enrollments, both elected and default, in writing. One state law required that an employer could not withhold any deductions from wages without express authorization in writing. EBSA determined that the law at issue impermissibly prohibited the automatic enrollment provisions of ERISA plans. Therefore, EBSA concluded that to the extent that the state law is interpreted to limit, prohibit, or regulate deductions from wages for contributions to an ERISA-covered plan, it is preempted by ERISA §514(a). (EBSA Advisory Opinion No. 2008-02A, February 8, 2008.)

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