Wage Garnishment Rules
Wage garnishment involves the withholding of a person's wages and earnings to pay that person's debt. Garnishments cannot be processed without a court order. In addition to the court order, the collector of the garnishment must follow the regulations set forth by the U.S. Department of Labor when requesting and processing the garnishment.
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Employee Dismissal
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The Consumer Credit Protection Act prevents employers from terminating employees as a result of wage garnishment orders. The employer is required to follow the issued court order and must withhold the specified funds for payment. The garnishment order provides the employer with instructions as to where and how to send the withheld payment. Although the Consumer Credit Protection Act protects employees from termination due to a first garnishment, it does not protect employees from termination resulting from second or subsequent garnishment orders.
What Can Be Garnished?
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Title III of the Consumer Credit Protection Act provides that earnings from personal services can be garnished. These personal service earnings include wages, salaries, commissions, bonuses, pension and retirement program income, bank accounts and student loans. Social Security benefits are generally exempt from garnishments. However, these benefits are not exempt from garnishments that result from delinquent federal taxes, child support enforcement or alimony obligations.
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How Much Can They Take?
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Garnishment laws allow for maximum withholdings of 25 percent of the individual's disposable weekly income. This amount can be adjusted if you are paid on a schedule other than weekly (such as bi-weekly or monthly), or if your disposable earnings for the week exceed 30 times the federal minimum hourly wage. To ensure that the garnishment follows judicial requirements, the court sets the garnishment amount at the time of order issuance.
What Are Disposable Earnings?
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The U.S. government defines disposable earnings as the amount of money left over after legally required deductions are withdrawn. Legally required deductions are federal, state and local taxes, as well as Social Security, unemployment insurance and state employee retirement systems deductions. These deductions do not include union dues, health insurance, life insurance or charitable deductions and will not be considered when determining your amount of disposable income.
Does the Employer Have to Comply?
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Yes. Your employer is required to comply with the court-ordered garnishments and amounts. In addition, if your employer fails to comply with the order or unlawfully terminates your employment, the employer may be required to reinstate your employment, pay back lost wages and restore the improperly garnished payments. The Department of Labor reserves the right to initiate court proceeding against the violating employer. The employer may also become subject to up to a $1,000 fine and up to one year in prison.
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