Wage Garnishment & Severance Pay
Laws concerning wage garnishment and severance pay are set by the United States Department of Labor. A garnishment is when earnings are withheld from an individual following a legal procedure where a judgment has been obtained against that individual. Severance pay is money granted after a termination.
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Garnishment Limits
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An employee cannot be terminated because of a wage garnishment requirement, despite the number of collections against him. Except in certain cases, garnishments cannot exceed 25 percent of an employee’s gross earnings in a pay period.
Limit Exceptions
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Garnishments can exceed the 25 percent deduction limit when ordered for child support, back taxes and bankruptcy. Up to 65 percent of gross earnings can be taken for child support. No limits are set for bankruptcy or tax payments.
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Severance Pay
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According to the Fair Labor Standards Act, no conditions have been set for severance pay. This pay usually results from an agreement reached between an employee and employer. It is often based on the amount of time an employee served the employer.
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References
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