If Wages Get Garnished How Much Can They Take at One Time?
Title III of the Consumer Credit Protection Act is the federal law that sets the limit on the amount an employer can garnish from your pay within a single pay period. Employers that violate Title 111's provision can face criminal prosecution and a penalty of up to $1,000, or imprisonment of up to one year, or both.
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Identification
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A wage garnishment is a legal document that demands your employer withhold a certain portion of your wages to fulfill a debt you owe. The garnishment can be court-ordered, such as those initiated by creditors for personal loans, medical bills, and credit cards; or issued by a legal entity, such as the state taxation agency or the Internal Revenue Service. A wage garnishment is a statutory deduction --federal or state law requires it. Therefore, the employer is legally required to make the deduction until the debt is satisfied or the issuing agency orders the withholding to stop.
Limits
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For ordinary wage garnishments, such as those sought by creditors, your employer can withhold the smaller of the amount exceeding 30 times the federal minimum wage or 25 percent of your disposable income. It can withhold up to 15 percent for a single federal student loan garnishment. It can withhold multiple garnishments at once if the amount does not exceed 25 percent.
For example, your employer receives two separate orders for student loan at 10 percent each. Your employer can withhold them simultaneously, since the total does not exceed 25 percent. But if you have an existing garnishment for 25 percent, your employer cannot withhold any more garnishments until the current one is satisfied. For an IRS wage levy, your employer consults IRS Publication 1494 to determine the amount of pay exempt the levy.
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Support Limits
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Your employer can withhold up to 50 percent of disposable income for child support and alimony if you are currently supporting a child or spouse excluded from the support order. Otherwise, it can deduct up to 60 percent. It can also withhold an extra 5 percent for support payments more than 12 weeks in arrears.
Priority
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Wage garnishments are generally processed on a first-come first-served basis. However, IRS and state tax levies, and child support orders take priority over all other garnishments.
Considerations
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Determine your disposable income by subtracting payroll taxes and voluntary pretax benefits (such as traditional 401(k) and flexible spending accounts) from your gross income. Your state may have garnishment laws that mirror or differ from federal law. Your employer should apply federal law if it provides greater exemptions or benefits than state law. Title III prohibits your employer from discharging you because it received a single wage garnishment against you.
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References
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