Yesterday’s Advisor featured basic guidance concerning wage garnishments. Today, the rules of priority: Which one do you pay first?
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Dealing with one garnishment is tricky enough, but they often come in multiples, and then you have to determine what order to pay them in. For guidance, we turned to the HR.BLR.com® website. Generally, the site says, garnishments are to be made in the following order:
1. Child support or alimony orders. These orders have priority over other garnishments. The federal Child Support Enforcement Act requires each state to have garnishment laws that ensure collection of child support orders issued from all courts throughout the United States.
2. Federal tax levy. In most circumstances, a federal levy for nonpayment of federal taxes generally takes precedence over all other debts except family support. Called a “levy of wages,” it will come from the Internal Revenue Service to the employer and should state the amount the employee owes, the kind of tax, instructions on calculating the amount to be withheld, and the amounts that are exempt.
3. Guaranteed student loans. The HEA allows the U.S. Department of Education to garnish up to 10 percent of an employee’s disposable income to repay a student loan. No judicial order is needed. The HEA preempts state law regarding garnishment and requires that the employee receive 30 days’ written notice before garnishment action is taken. Employers that don’t comply with guaranteed student loan garnishments risk being sued for the owed amount. Student loans are handled under the Administrative Wage Garnishment Act.
Garnishments a hassle and multistate makes them that much worse? Figure it all out on October 16 with a new interactive webinar, Wage Attachments and Tax Levies: Multi-State Employer Compliance Essentials. Learn More.
4. Federal agency/nontax. The DCIA allows the Secretary of the Treasury to collect any debt that has been delinquent for a period of 180 days owed to the federal government. Debts may be collected without a court order.
5. Creditor garnishment. Title III of the Consumer Credit Protection Act does not address the issue of priority of garnishments, so state law may govern this aspect. Generally, when an employer receives multiple garnishment orders, the creditors are paid one at a time in the order in which the documents are received. For example, if there is $25 per week available for garnishment, and the first garnishment is for more than $25 per week, the first creditor receives payment, and the second receives nothing until the first claim is fully satisfied. Check the laws of your state. If a state law differs from Title III, the law resulting in the smaller garnishment or otherwise giving the employee more protection should be observed. An order from a bankruptcy court should be honored before other consumer debts because creditor claims are consolidated.
Garnishment—just one more comp and benefits challenge that’s more complex than it should be. Fortunately, there’s help—an informative webinar designed for multi-state employers on October 16. Our presenter will provide a roadmap for managing your compliance obligations when presented with a wage attachment—from how to address a situation where an employee’s earnings don’t cover multiple garnishments to understanding the penalties your organization could face for improperly handling wage attachments.
In just 90 minutes, you’ll learn how to legally master your compliance obligations when presented with a wage attachment. Register now for this informative event risk-free.
Garnishments and Wage Attachments—Arrrrgh! Join us October 16 for a new interactive webinar, Wage Attachments and Tax Levies: Multi-State Employer Compliance Essentials. Earn 1.5 hours in HRCI Recertification Credit. Register Now.
By participating in this interactive webinar, you’ll learn:
- What to do when you receive a notice of a wage attachment
- Penalties for improper handling of wage attachments
- Administrative fees you generally may be able to charge for the different types of wage attachments
- How far the Consumer Credit Protection Act (CCPA) and state laws go to protect employees from discrimination and discharge due to wage attachments
- Tricky compliance issues affecting multistate employers, including determining which state law to apply to which type of attachment
- What to do with wage attachments when an employee files for bankruptcy
- Tips for dealing with protesting employees who want the garnishment or tax levy stopped
- If and when you have to accept voluntary wage assignments
- And much more!
Register now for this event risk-free.
Thursday, October 16, 2014
1:30 p.m. to 3:00 p.m. (Eastern)
12:30 p.m. to 2:00 p.m. (Central)
11:30 a.m. to 1:00 p.m. (Mountain)
10:30 a.m. to 12:00 p.m. (Pacific)
Approved for Recertification Credit
This program has been approved for 1.5 credit hours toward recertification through the Human Resource Certification Institute (HRCI).
Join us on October 16—you’ll get the in-depth Wage Attachments and Tax Levies: Multi-State Employer Compliance Essentials webinar AND you’ll get all of your particular questions answered by our experts.
Train Your Entire Staff
As with all BLR/HR Hero® webinars:
- Train all the staff you can fit around a conference phone.
- Get your (and their) specific phoned-in or e-mailed questions answered in Q&A sessions that follow the presentation.
Is this ranking generally applicable, or does it vary by state?