In re the Claim of Jones

Bebgait, P. J.

Claimant was employed as a packer in the employer’s nursery pad business at a wage of $49 a week. She owed the United States $140.40 for unpaid incomes taxes. On August 28, 1961 a levy was issued by the District Director of Internal Revenue and served on the employer ‘ directing it to withhold and turn over all of claimant’s accrued wages.”

The Unemployment Insurance Appeal Board has found that when the employer communicated with the Internal Revenue Service it was advised that ‘ ‘ it would be necessary to withhold her entire wages until the entire delinquency was satisfied.” The board found that the employer then told the claimant that it would * * * withhold all of her earnings ” until her indebtedness was fully paid. Claimant thereupon quit” the board found.

The issue in this case is whether she quit with good cause within section 593 (subd. 1, par. [a]) of the Unemployment Insurance Law (Labor Law, art. 18). The board held this was not good cause. We take another view. As the case reaches us it is posed by both claimant and the Industrial Commissioner as a question of law; there is no dispute of fact. Although the reasons stated by claimant in her report and in her claim included other grounds for termination, one that the employer itself *332terminated her employment and another that she had personal reasons for leaving, these reasons were expressly rejected by the Referee who found as a fact that “ She knew she quit because of the tax levy and the employer’s intent to withhold her Avages to pay the leAy in full.”

This factual finding not only was not disturbed by the Appeal Board in reversing the Referee, but its own finding is to the sarnie effect. Indeed this is the report of the employer to the Department of Labor. When we notified-employee to the effect that all monies earned would have to be sent to the Internal Revenue Service until the lien was satisfied, she left our employ.” The employer also reported that although it had attempted to arrange Avith the Internal Revenue Service to take out of her wages “ a specified amount each week ’ ’ that ‘1 they were adamant in their refusal.”

The problem is, whether confronted with a decision of the employer to withhold all her future wages until the lien of the tax claim was satisfied, claimant quit her employment with just cause. Unless there was lawful authority for a levy upon all her -future wages in these circumstances and for the announced decision of the employer to withhold all her future wages, it is not easy to see what alternative she had. It is not reasonably to be expected that a worker is to continue to provide the necessities of life without the benefit of any of the wages he earns, even though the indebtedness upon which the wages are all taken is entirely just and incurred through the fault or neglect of the worker himself. No industrial society tolerates the total deprivation of future earnings for the collection of debt; and all legal machinery for the enforcement of claims against wages allows some tolerance for the minimal needs of the employee AA'hile he works off the debt.

It has been the consistent policy of this State for many years to prevent the denuding of all future compensation, for labor to be performed, either through intentional assignment of wages by the worker himself or by legal processes for the collection of debt even though the underlying indebtedness itself may have been incurred through the improvidence or other.fault of the worker. For example article 3-A of the Personal Property Law (added by L. 1950, ch. 823) closely regulates the conditions under Avhich assignments of future earnings will be valid. It expressly exempts a basic portion of the assignor’s earnings which cannot be made the subject of assignment. (§ 48-b.)

The provisions of section 684 of the Civil Practice Act carefully limit the proportion of wages which are subject to continuing leAy; and the provisions of section 793 of the Civil Prac*333tice Act authorizing a direction for installment payment of a judgment, require that the court shall take into account “ the reasonable requirements of the judgment debtor and his family ’ ’ as well as garnishees and assignments which may relate to his future earnings. (See, also, Labor Law, §§ 197,198; Penal Law, § 1272.) It is clear, therefore, that the law of New York will not countenance a complete taking of future wages to be earned by a worker either by the act of public authority or by the consent of the worker himself.

Indeed the Industrial Commissioner concedes in this court that the levy of the United States for $140.40 could not be made under the Federal law against future wages, but could attach only to an amount due to claimant at the time of the levy (U. S. Code, tit. 26, §§ 6321-6332). This was the clear holding of the Second Circuit in United States v. Long Is. Drug Co. (115 F. 2d 983, Augustus N. Hand, C. J,). (See, also, Matter of Halprin, 280 F. 2d 407.)

The case before us is somewhat similar in principle to Matter of Thunelius (Catherwood) (18 A D 2d 948 [1963]) in which it was held the discharge of claimant as a result of the employer’s policy not to tolerate garnishees on wages was not a voluntary leaving of employment without good cause where his indebtedness had become so large as to be regarded as beyond his control. See, also, Matter of Cowan (Catherwood) (17 A D 2d 232) where leaving the remaining one of two part-time jobs was held to be with good cause due to the insufficiency of the salary of the remaining job.

Although the Appeal Board speculated that the Director of Internal Revenue might make future levies on each week’s wage as it became due, this is clearly not what happened in this case. The levy was literally for “ accrued wages ” at the time it was made. Upon the basis of a single levy on a particular date the employer advised claimant that future wages would be withheld. We do not doubt that the employer acted entirely in good faith in stating to claimant that “ all monies earned would have to be sent ’ ’ to the Internal Revenue Service. But whether or not claimant knew her legal rights in such a situation, her decision not to accept a total deprivation of future earnings was legally correct and she is entitled to the benefit of the correct position.

We add that it would easily have been possible to enforce the lien by processes which would have allowed claimant enough of her wages for the sustenance of herself and her young child while the debt was being worked out. Claimant left her job for good cause.

*334The decision of the. Unemployment. Insurance Appeal Board should be reversed, with costs to appellant,..and the claim remitted to the. Industrial Commissioner..