A wage garnishment is a legal order to an employer to withhold money from an employee's paychecks to satisfy a debt he owes. Federal law and some states provide discharge protection to employees subject to wage garnishment, meaning the employee cannot be fired because of a single garnishment. These laws typically have limitations, however.
Consumer Credit Protection Act
Title III of the federal Consumer Credit Protection Act governs wage garnishment. Under the CCPA, your employer cannot fire you because it received one wage garnishment against you. You lose that protection if you have more than one wage garnishment, and can be fired if your employer receives multiple garnishments against you. The multiple garnishment rule applies whether the garnishments are by two or more separate creditors, or by one creditor garnishing your wages for multiple debts.
Your state may follow federal guidelines, restricting discharge protection to a single wage garnishment. However, some states provide additional protection. For example, Colorado does not limit discharge protection -- you cannot be fired for a wage garnishment regardless of how many have been issued against you. In Connecticut, your employer cannot fire you unless it receives more than seven wage garnishments against you in one calendar year. State law may make it illegal for an employer to discipline, suspend or refuse to hire someone because of a wage garnishment. If both the CCPA and state law applies, your employer must use the law that gives you the most benefits.
To learn your wage garnishment rights under state law, contact your state labor department, the local courthouse where your employer is located, or an employment attorney.
An employer that violates the federal discharge protection laws may be ordered to reinstate the terminated employee, pay her back wages and fix any incorrectly garnished amounts. Intentional violations-- where the employer knew about the discharge protection law but willfully disregarded it -- can result in criminal prosecution, with a maximum fine of $1,000 and imprisonment of up to a year.
If your employer violates federal or state discharge protection laws, file a complaint with the United States Department of Labor, Wage and Hour Division or your state's labor department.
Addressing Employer Concerns
Because a wage garnishment means that the debtor failed to voluntarily repay a debt, an employer might also interpret it as the employee not being responsible or trustworthy, particularly if handling money is part of your job. If you're subject to wage garnishment, you should know about it before your employer receives the paperwork. To help ease any concerns your employer may have, tell your boss or human resources representative about possible wage garnishments beforehand.