Wage Garnishment andFamily Support Withholding

What Supervisors Need to Know

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Understand the meaning of wagegarnishment and family support withholdingRecognize the requirements of relevant lawsIdentify the organization’s responsibilities for handling these orders properlyProvide affected employees with accurate information about withholding procedures

Understand the meaning of wagegarnishment and family support withholdingRecognize the requirements of relevant lawsIdentify the organization’s responsibilities for handling these orders properlyProvide affected employees with accurate information about withholding procedures

Session ObjectivesYou will be able to:

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What Is Wage Garnishment?• Court or

administrative order• Withholding from

wages• Repayment of a debt

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• Court order• Child support and/or alimony

withholding from wages• Activated when employee is late with

payments• Applies to both regular and temporary

employees

• Court order• Child support and/or alimony

withholding from wages• Activated when employee is late with

payments• Applies to both regular and temporary

employees

What Is Family Support Withholding?

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Which Laws Govern?• Consumer Credit

Protection Act• Social Security Act• Child Support

Enforcement Act

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Which Laws Govern? (cont.)

• Debt Collection Improvement Act

• Higher Education Act

• State laws

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What Are “Disposable Earnings”?• Wages minus

required deductions

• Deductions that aren’t required don’t count

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Lesser of:

• 25% of weekly disposable earnings, OR

• Disposable earnings minus (30 x federal minimum wage)

Maximum Withholding Allowed for Debt

Maximum WithholdingFor Family Support

if not supporting another family

65% and 55% if 12 weeks or more behind in payments

Max. Withholding

60%

Max. Withholding

50%

if supporting another family

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Maximum Withholding For Tax Liens• Garnishment order

states amounts and how to calculate

• Exemptions

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Maximum Withholding For Administrative Orders• Up to 15% of

employee’s weekly disposable earnings

• Earnings/minimum wage formula

• Sent within 10 days of payday

• Multiple orders

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What Is the Effect Of Bankruptcy?• Protections

• Exemptions

• Duration

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Garnishment and Family Support: Definitions

Garnishment: An order by a court or government agency requiring an employer to withhold a certain sum from a worker’s wages to repay a debt

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Garnishment and Family Support: Definitions

Family support withholding:A court order requiring withholding to pay child support and/or alimony

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Garnishment and Family Support: Definitions

Disposable earnings:What’s left of a worker’s weekly paycheck after legally required deductions are taken out

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Garnishment and Family SupportDo you understand:• What garnishment

and family support withholding are?

• The laws that apply?• The maximum

amounts that may be legally withheld from employees’ wages?

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• Family support• Tax liens• Guaranteed student loans• Administrative orders for

any other debt owed to U.S. government

• Garnishment for consumer debt

• First come, first served• Multiple withholding orders

How to Determine Priority• Family support• Tax liens• Guaranteed student loans• Administrative orders for

any other debt owed to U.S. government

• Garnishment for consumer debt

• First come, first served• Multiple withholding orders

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How to Handle Withholding Orders • Never ignore garnishment or support

orders• Discuss problems immediately with

court or agency• Beware of official-looking documents

from collection agencies• Consult an attorney• Withhold the allowed processing fee

• Never ignore garnishment or support orders

• Discuss problems immediately with court or agency

• Beware of official-looking documents from collection agencies

• Consult an attorney• Withhold the allowed processing fee

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Answer the order quickly

Calculate the amount correctly

Don’t withhold more than law allows

Log the order

Keep accurate records of payments

Other Important StepsAnswer the order quickly

Calculate the amount correctly

Don’t withhold more than law allows

Log the order

Keep accurate records of payments

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What You Should NOT Do

• Retaliate against employees because of a garnishment order

• Retaliate because of a family support order

• Refuse to hire an applicant because of a support order

NOT

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• Talk to creditors and negotiate a payment plan

• Contact the state consumer credit office

• Make payments as agreed

• Get financial counseling

How Employees Can Avoid Garnishment • Talk to creditors and negotiate a

payment plan• Contact the state

consumer credit office• Make payments

as agreed• Get financial counseling

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How to Reverse Garnishment • Claim an exemption

• Pay the amount owed

• Let the garnishment proceed and pay off the debt

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Garnishment and Support Procedures: Q& A

What should you do if you can’t honor What should you do if you can’t honor a garnishment order?a garnishment order?Contact the court or agency and explainWhat should you record about these orders?Payments made, when, for whom, and to whom

Q.A.Q.A.

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Garnishment and Support Procedures: Q& A

How could an employee avoid garnishment?Negotiate a payment plan with the creditorWhich orders always have top priority?Family support orders

Q.A.Q.A.

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Garnishment and Support ProceduresDo you understand the information presented in the previous slides?

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Key Points to Remember!Never ignore a wage garnishment or family support orderRespond promptly and withhold the correct amountKeep a record of all orders and paymentsDon’t discipline or fire employeesbecause of withholding ordersHelp employees understand how they can avoid garnishment