Wage garnishment refers to any type of deduction from an employee’s wages based on a legal mandate. This may come in the form of a court order, which details the amount the employer is required to withhold and where that sum needs to go. Some agencies also have the authority to request a wage garnishment without a court order.
There are both state and federal regulations involved in the garnishment of wages. At the federal level, the Consumer Credit Protection Act (CCPA) is the regulation that limits how much of an employee’s wages may be garnished. The CCPA also states that an employer may not fire an employee simply for having a single wage garnishment. The CCPA, along with other local regulations, outlines what types of debt may be subject to a wage garnishment order and how much of an individual’s paycheck may be withheld for various types of wage garnishments. Remember to always check state and local laws, and consult legal counsel if you have questions.
How Does Wage Garnishment Work?
In general, the process works like this: If an employee owes a debt and the creditor cannot get payment through traditional means, the creditor can sue to get a court order for wage garnishment. As noted above, the garnishment is subject to federal and state limits, which vary by type of debt.
When there are multiple garnishment orders, wage garnishment regulations also dictate a hierarchy, or priority, that must be applied based on debt type. This might mean that some of the garnishment orders may not be fulfilled if the garnishment limits are reached before all of the orders are completed.
When an employer receives a garnishment order, it dictates the amount that must be withheld and where it must be paid.
What Types of Debts Can be Garnished from Wages?
Technically, almost any debt could end up being repaid as a wage garnishment if the creditor goes through the legal process of suing the garnishee and obtaining a court order for such a garnishment. But there are several specific types of debt that are frequently the subject of wage garnishment orders, and even some that can be required without a court order. Here are the most common types:
- Child support and/or alimony. This type of garnishment is the first one that typically comes to mind, which is likely because child support orders are immediately subject to wage garnishment, unlike other debts that must have a wage garnishment order sought separately. Child support garnishments can be up to 60 percent of the individual’s disposable earnings if there are no other spouses or children to support (besides those covered by the court order). Even when there is another spouse or additional children, this garnishment limit is still high at 50 percent of disposable earnings. Either way, the amount can be increased by 5 percent if the earner is 12 or more weeks behind in payments.
- Income taxes owed. When income taxes go unpaid, the government can seek repayment via wage garnishment. They can even bypass the need for any type of court order. How much the Internal Revenue Service can take per paycheck depends on the total financial situation, including the garnishee’s dependents and other deductions.
- Student loan payments. This is yet another garnishment that doesn’t require a court order. For any borrower who falls behind on student loan repayment, the Department of Education can initiate a wage garnishment, as can any organization acting on its behalf. These garnishments also have limitations. In this case, garnishment cannot exceed 15 percent of disposable earnings[i].
Beyond these common garnishments, most other creditors can seek to have wages garnished, but will have more steps to complete before the garnishment can occur. Typically, creditors must first win the judgment against the individual granting the repayment, and then must separately seek a court order for the garnishment—a step that often occurs when other repayment avenues have been unsuccessful. For general creditor garnishments, the total garnishment cannot exceed 25 percent of disposable earnings[ii].
It’s important to keep in mind that these limits are only referencing the federal guidelines. Your state may have stricter limits.
***This article does not constitute legal advice. Always consult legal counsel with specific questions.
[i] Note: there are additional rules for the garnishment limits in some cases. For example, in the case of student loan repayments and court judgments against the individual, the garnishment cannot make the weekly disposable wages fall below 30 times the federal minimum wage.
[ii] See note above.
About Bridget Miller:
Bridget Miller is a business consultant with a specialized MBA in International Economics and Management, which provides a unique perspective on business challenges. She’s been working in the corporate world for over 15 years, with experience across multiple diverse departments including HR, sales, marketing, IT, commercial development, and training.