Wage garnishment occurs when earnings of an individual are withheld by an employer for the payment of a debt. Most garnishments are required by court order.

Which Federal Law Regulates Wage Garnishment?

Title III of the Consumer Credit Protection Act limits the amount of an employee’s earnings that may be garnished and protects an employee from being fired simply because their pay is being garnished for a debt. This law is administered by the Wage and Hour Division of the Department of Labor’s Employment Standards Administration.

To Whom Does the Law Apply?

This federal law protects everyone receiving personal earnings, such as wages, salaries, commissions, bonuses, or income including earnings from a pension or retirement program. Tips are not considered earnings for the purposes of the wage garnishment law.

The law does not affect voluntary wage assignments, which are situations in which workers voluntarily agree that their employers may turn over some specified amount of their earnings to a creditor or creditors.

Since it is a federal law, this law applies in all 50 states, the District of Columbia, Puerto Rico, and all U.S. territories and possessions.

What Is the Protection Against Discharge When Wages Are Being Garnished?

The law prohibits an employer from firing a worker based on the fact that the worker’s earnings have been subject to garnishment for any one debt, regardless of the number of levies made or proceedings brought to collect it. However, the law does not prohibit discharge if the employee’s earnings have been garnished for a second or subsequent debts.

What Are the Restrictions on Wage Garnishment?

The amount of pay subject to garnishment is based on an employee’s "disposable earnings," which is the amount left after legally required deductions have been made for federal, state, and local taxes, Social Security, unemployment insurance, and State employee retirement systems.

Other deductions, such as those for union dues, health and life insurance, contributions to charitable causes, voluntary wage assignments, purchases of savings bonds, and payments to employers for payroll advances or purchases of merchandise, are not required by law and may not be subtracted from gross earnings when calculating the amount of disposable earnings.

The law sets the maximum amount which may be garnished in any work week or pay period, regardless of the number of garnishment orders received by the employer. The amount may not exceed the lesser of these two figures:

  • 25% of the employee’s disposable earnings
  • The amount equivalent to 30 times the federal minimum wage

What About Child Support and Alimony?

Specific restrictions apply to court orders for child support or alimony. The garnishment law allows up to 50 percent of a worker’s disposable earnings to be garnished if the worker is supporting another spouse or child, and up to 60 percent for a worker who is not. An additional 5 percent may be garnished for support payments more than 12 weeks behind.

Are There Any Exceptions to the Law?

The wage garnishment law specifies that garnishment restrictions do not apply to bankruptcy court orders and debts due for federal or state taxes.

If a state wage garnishment law differs from the federal law, the law resulting in the smaller garnishment must be observed.

Do I Need an Employment Attorney?

Having wages garnished can be a very difficult and trying time, especially if you feel it is unfair or overly burdensome. Consult an experienced employment attorney and check to see what rights you may have with regard to your wages being garnished.