Which Federal law regulates wage garnishment?
A The Federal Wage Garnishment Law, Consumer
Credit Protection Act's Title 3 (CCPA) limits the
amount of an employee's earnings that may be garnished
and protects an employee from being fired if pay
is garnished for only one debt. Title III is administered
by the Wage and Hour Division of the Department
of Labor's Employment Standards Administration.
The Wage and Hour Division has no other authority
with regard to garnishments. Questions over issues
other than the amount being garnished or termination
should be referred to the court or agency initiating
the withholding action. For example, questions regarding
the priority given to certain garnishments over
others are not matters covered by Title III and
may be referred to the court or agency initiating
the garnishment action.
Are there any exceptions to the law?
A The wage garnishment law specifies that
the garnishment restrictions do not apply to certain
bankruptcy court orders, or to debts due for federal
or state taxes. If a state wage garnishment law
differs from the CCPA, the law resulting in the
smaller garnishment must be observed. You may be
able to claim one or more exemptions and avoid paying
the judgment or at least a portion of it.
Account funds that are from:
Child Support Payments
U.S. Government Pension
Supplemental Security Income (SSI)
Temporary Assistance for Needy Families
Certain funds in a joint or community account
Other public Assistance or Income allowed by State
order to protect your right to claim these exemptions
you must, within 28 days from the date on the Writ
of Garnishment, deliver to the court clerk and mail
a copy to the plaintiff, the completed Exemption
Do I still have to comply if my employee's pay is
Yes. You must comply, but the amount you withhold
may be reduced. The law (15 USC § 1673) imposes
a maximum on how much can be garnished at any one
time. Currently, that maximum is 25 percent of the
employee’s disposable pay until the prior garnishment(s)
are satisfied or expired.
wage garnishment orders (AWG) don't expire, although
some garnishments do expire before the full amount
has been paid. Once a prior garnishment expires
or is satisfied, the next garnishment in line usually
same federal law that imposes a garnishment maximum
also protects a "floor" level of income
equal to 30 times the federal minimum wage per week.
Can I ignore the Order if state law forbids wage
No. AWG is authorized by a Federal law (20 USC §
1095a), which specifically preempts state law.
What do I do if the Order says to send payments
to someone other than OCAP?
Send the payments to the payee listed in the Order.
Guaranty agencies such as OCAP are permitted to
retain others to aid in the administration of the
AWG process including the collection of payments
under an Order.
What if my employee works part-time and doesn't
make enough to be withheld?
Contact us that the debtor
doesn't earn enough to withhold.
What are the consequences if I fail to comply?
A non-compliant employer will be liable for and
subject to suit by OCAP to recover any amount the
employer fails to withhold after receipt of notice
of the AWG Order, plus attorneys’ fees, costs and,
at the court’s discretion, punitive damages.
Do I have to honor an AWG Order that isn't signed?
Yes. The law (20 USC § 1095a) doesn't require that
the Order be signed to be valid and legally binding.
However, if you have any question about the Order’s
authenticity, please contact
Can I impose a fee for administering this? If I
can, who pays?
The statute and regulations authorizing AWG don't
provide for an employer processing fee. This is
an issue that you should discuss with your legal
What should I do if my employee filed for protection
Contact us and include
a copy of the 341 Meeting Notice or provide the
case number, district, date of filing and the state
where the action was filed. While we must cease
our collection efforts during an active bankruptcy,
please be advised that student loans are non-dischargeable
in most cases.
What should I do when I get a balance letter?
Update your records. Balance letters are sent periodically
to keep you informed of the current outstanding
Do I also have to garnish my employee's bonus/commission
Yes. You must withhold 10 percent from all monies
paid to the employee. Some restrictions do apply
to some payments of workers' compensation, disability,
Does my employee have to consent to the order or
sign the paperwork?
No. The information and forms sent to you are for
your use only. There's nothing in the packet that
requires the employee’s signature.