A wage attachment, also known by the term wage garnishment, happens when there is a court order requiring an employer to use (attach) some portion of an employee’s wages to some other purpose, such as repaying a debt or paying child support. When an employer receives an order for wage attachment/garnishment, the employer must comply with it and also must provide a copy to the employee. The most common types of debts that are repaid via garnishment (through official court order) include things like child support, taxes, fines, unpaid loans, or other legal judgments.
Wage Attachments: Legal Matters
Employers should know—and should communicate to payroll employees accordingly—that failure to comply with wage attachment/garnishment orders in a timely manner can result in legal penalties and fines for the employer. Additionally, there are legal guidelines that explain how much of an employee’s paycheck can be garnished for a particular purpose. It can become even more complex when there are multiple garnishment orders in place.
Title III of the federal Consumer Credit Protection Act (CCPA) is what governs wage garnishments. According to the Wage and Hour Division of the DOL:
“The wage garnishment provisions of the Consumer Credit Protection Act (CCPA) protect employees from discharge by their employers because their wages have been garnished for any one debt, and it limits the amount of an employee’s earnings that may be garnished in any one week. CCPA also applies to all employers and individuals who receive earnings for personal services (including wages, salaries, commissions, bonuses and income from a pension or retirement program, but ordinarily not including tips).”[i]
There are also rules around which type of garnishment takes precedence if there are multiple wage attachment orders in effect. Different states have their own rules regarding the maximum amounts of an employee’s wages that may be garnished in a given pay period. And the maximum amount often differs depending on the type of garnishment. For example, garnishments for child support usually have higher maximums than other types of garnishments. Be sure to know the legal obligations for each of the jurisdictions your organization is doing business in.
Employers are not allowed to fire or otherwise discipline or retaliate against employees simply for having a wage attachment. They should not have a bearing on employment decisions. However, the law provides fewer protections when there are multiple wage attachments.
From an HR standpoint, the primary impact is on payroll administration. Wage attachments are a component of properly handling payroll and compensation. The payroll team needs to know how to implement the garnishment properly in each location, as it may differ. They should all have legal compliance training to ensure they know the boundaries for garnishments from the CCPA, as well as any state laws that may differ. The employer should also consider providing training for managers and others who may end up receiving the garnishment order on behalf of the employer. Anyone privy to the wage garnishment information should know that it should not be used in employment decisions.
[i] https://www.dol.gov/whd/garnishment/
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.