Wage garnishment is the equitable or legal procedure employers can use to withhold
a funds from employees earnings. This process could be use if if the individuals
payments need to be withheld to fulfil a debt.
The largest proportion of garnishments are undertaken by court orders and can also
include levies for unpaid tax instructed by STATE or IRS collection agencies.
Other garnishment examples include administrative claims by Federal agencies for
issues concerning non-tax debt that are owed to the Federal government.
The process of wage garnishments does not include any agreement setup by the employee
and employer to set aside a set amount of funds to pay off a personal creditor and
Specific wage garnishment law?
Although each state has it's own interpretation of the wage garnishments laws they
all are governed by the Federal wage garnishment law that goes by the title of Consumer
Credit Protection Act or CCPA. This law limits the total amount of funds an employer
can garnish from an employee and was setup to protect the employee from possible
job loss if the employer would like to garnish more the one debt or a higher sum.
This particular law is administered by a division of the Department of Labors Employment
Standards Administration called: "The wage and Hour division". This garnishment law
doe not cover the all questions and issues associated with garnishment and questions
such as, who should take priority when it comes to payments are dealt with elsewhere
usually by the agency or court that initiates the garnishment.
Who does the law apply too?
The main aim of the law is to protect all employees, anyone who receives any form
of personal earnings including: commissions, bonuses, wages pensions and retirement
policies and any other personal income. Some areas that are not covered by this law
include (in some cases) tips from service work from customers and this is generally
not considered as income under this garnishment law.
In what States does the law apply
This law applies to all 50 US states and the District of Columbia. It also includes
all US possessions and territories.
Protection against discharge rules
An employer is prohibited from firing any employee who's wages are subject to an
individual garnishment for a debt, no matter how many proceeding or levies are brought
against that debt to be collected. The law does not protect the employee against
discharge if the employee has more than one garnishment against two or more debt.
How much can your employer take?
The total amount of funds that can be garnished from your wages is based on the employers
disposable income after taking into account deductions that are legally allowed such
as: state or federal tax requirements, state unemployment insurance and social security
commitments and private employee retirement schemes that are required by law.