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THIS WEEK’S E-TIP: The ABC’s of Garnishments
Published by Personnel Policy Service, Inc.
THIS WEEK’S E-TIP: The ABC’s of Garnishments

You just received a garnishment order for an employee’s wages. Do you
know how much you can withhold legally from his wages to meet this
order? Find out proper procedures to follow to carry out a garnishment.
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THIS WEEK’S E-TIP: The ABC’s of Garnishments

When an employee’s wages are garnished, the responsibility falls on
your organization to carry out the order. So, you need to know how
much money you legally can withhold, and what steps to take to ensure
the order is fulfilled. And, even if you feel complying with the
garnishment is burdensome, you generally cannot terminate or discipline
an employee who has his wages garnished. Below is a primer
explaining how to handle garnishments.

* Garnishment Explained *

For employers, garnishment is the legal process by which a court
requires you to deduct money from an employee’s wages and remit it to
a third party to satisfy an obligation of the employee. (Download free
Personal Finances of Employees model policy
Garnishments are used to collect such items as past due debts, court-ordered
support payments, tax levies, delinquent student loans, and amounts due in

Note that federal law prohibits you from terminating or disciplining an
employee whose earnings have been garnished for one indebtedness.
Accordingly, you should not take disciplinary action against an employee
for a garnishment. Some employer policies provide that garnishments
for more than one indebtedness within a specified period of time (not
less than a year) will be grounds for termination. However, you should
check state law for restrictions, since some states protect employees
from discipline, as well as termination, even after garnishments for
multiple debts.

* Federal Restrictions and Requirements *

The federal Consumer Credit Protection Act (CCPA), found at 15 U.S.C.
§§1671 et seq., restricts the amount of an individual’s disposable
earnings that may be garnished.

Under the provisions of the CCPA, the maximum part of the aggregate
disposable earnings that may be garnished for the workweek may not
exceed the lesser of: (1) 25% of the employee’s disposable earnings for
that week; or (2) the amount by which the employee’s disposable
earnings for that week exceed thirty times the federal minimum hourly
wage in effect at the time the earnings are payable. (Current minimum
wage of $5.85 per hour increases to $6.55 on July 24,2008.)

The term “disposable earnings” is defined as that part of the total
earnings of an individual remaining after the deduction from those
earnings of any amounts required by law to be withheld. If the applicable
pay period exceeds one week, the federal regulations at 29 C.F.R.
§870.10(c) should be consulted to determine the appropriate multiples
for computing the maximum amount of disposable earnings subject to

The restrictions described above do not apply in the case of: (1) any
order of a bankruptcy court under Chapter XIII of the Bankruptcy Act; (2)
any debt due for any state or federal tax; or (3) any court order for the
support of any person. The CCPA does not place any restrictions on
amounts that may be withheld for state or federal taxes or in Chapter XIII
Bankruptcy Act proceedings. However, the maximum amount of an
individual’s disposable weekly earnings that may be garnished for
support is limited to:

(1) 50% if the individual is supporting a spouse or a dependent child
and the garnishment for support concerns someone else, such as a
former spouse or another dependent child;
(2) 60% if the individual is not supporting any additional dependents;
(3) the above percentages are increased to 55% and 65%
respectively, if the order concerns support payments which are more
than 12 weeks in arrears.

The CCPA also prohibits termination of an employee because his
earnings have been garnished for one indebtedness. (Download free
Personal Finances of Employees model policy
.) Thus, the CCPA
protects an employee whose earnings have been garnished more than
once in the same year, but only if those garnishments relate to one debt.
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* State Restrictions *

In addition, you also must comply with any state laws in administering
garnishment orders. State laws often are more restrictive than the
federal CCPA and may prohibit garnishment, provide for smaller
garnishments, or prohibit adverse employment action against employees
whose earnings have been subjected to garnishment for more than one

For example, Pennsylvania only allows garnishments to collect for
support, recovery of state educational loans, and for four weeks or less
of room and board. Pennsylvania also prohibits employers from taking
any disciplinary action against employees on the basis of attachments for
support. So check your state law requirements as well.

* How to Implement the Garnishment Order *

Regarding procedures you should follow to implement the garnishment
order, most employers designate a single person or department (such as
the payroll manager) to administer garnishment orders. Typically, a
garnishment order is served by a government official personally (such as
by a sheriff) or through a certified mailing from the court or agency
ordering the garnishment. The order itself should explain how to remit
the payments to be collected from the employee. The payroll manager
(or other designated employer representative) then should notify the
affected employee and explain the employer’s obligation to fulfill the
garnishment order. Some states also allow employers to charge the
affected employee or the creditor an administrative fee to compensate
for the burden of processing the garnishment.

As a general rule, information about the garnishment should be kept
confidential and shared only with those who have a legitimate need to
know about the action, such as the payroll administrator. This
confidentiality can help protect the employee’s privacy, may prevent
unnecessary embarrassment, and should ensure that managers are not
aware of the garnishment and, therefore, will not subject the affected
employee to inappropriate disciplinary action because of it.

Typically, you should continue fulfilling the garnishment order until the
court or agency that issued the order sends a release letter. In the case
of multiple garnishments, state laws generally specify which take
precedence. Child support garnishments often are given the first priority.
Although the federal CCPA does not specify what you should do if an
employee is terminated or quits before the garnishment order is fulfilled,
most experts suggest that the employer should notify the issuing court or
agency of the termination and provide the employee’s last known

Because of the complexity of administering garnishment orders, you
should consult legal counsel to make sure you are in full compliance with
state and federal restrictions.
^^^^^^^^^^^^^^^^^ From Your HR Matters E-Tips Editors ^^^^^^^^^^^^^^^^^^^^^^^

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Subscribers to the Personnel Policy Manual (print/online) and HR Policy Answers on
CD can find a model policy on garnishments in Personal Finances of
Employees, Chapter 803, Comments (4) and (5), can find additional
information on garnishments in notes 6, 11, and 12 of Personal Finances
of Employees, Chapter 803.

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