Guide to Wage Garnishment

By Elspeth Crawford

Wage garnishments are governed by an array of state and federal laws, and employers are often confronted by demands from multiple garnishors who all insist that they be paid now. Although the law requires that a significant amount of information be sent to employers along with a demand for wage garnishment, there are some rules that may not be explained by that material.

How Is The Garnishment Obtained?

In a nutshell, here's how wage garnishment works. A person or entity obtains a judgment in court against an employee or a government agency determines that an employee owes a debt to them. Typically, the judgment relates to child support, unpaid taxes, or student loans. The person or entity to whom the debt is owed is the "garnishor." The employee is the "debtor." The garnishor then applies to a court (if it is a private entity) or goes through an administrative process (if it is a government agency) in order to get a "writ" for garnishment of wages. The writ is essentially the document which gives the garnishor the green light go go after the debtor's wages. That writ is delivered to the employer, as the entity controlling what is paid to the debtor, making the employer the "garnishee."

When must an employer start paying on the writ?

An employer is required to begin paying on the writ when it is received, unless there are other writs with higher priority (see below). An employer must return a statutory response form within seven days of receiving the writ whether or not the employer will start paying on the writ immediately. Payments are made every time that the employee gets paid and should be prorated if the writ was not in effect for the full pay period.

Can an employee challenge a writ?

The employee receives a copy of the writ of garnishment sent to the employer. The time period varies from state to state in which the employee may challenge the writ by sending a challenge to the garnishor. Once the employer gets notice that there is a challenge,the employer must not stop paying. Instead, the employer should send payments (on the same schedule) to the court that authorized the writ, rather than the garnishor. The court will hold the money until the challenge is resolved.

Was the writ sent to the proper employer?

The statutory response form contains several grounds pursuant to which an employer may contest the payment demanded in the writ. The most common objection is that the garnishee is not in fact the employer of the debtor. The employer should contact legal counsel if it has questions about whether it is the proper garnishee to ensure that it is complying with all legal requirements.

How much can be taken out of the employee's wages?

There is a cap on wage garnishment of 25% of take-home income. In addition, there is a "floor" level of income protected from garnishment that is based on a minimum wage per week. The statutory garnishment calculation worksheet that will accompany the writ will guide the employer through the proper calculations.

When can the employer stop paying on the writ?

Generally, writs of garnishment expire, whether they have been fully paid or not, within a time set by state law. However, writs issued by a county or county agency, and federal student loans writs, do not expire until paid in full. In general, writs may be "continued" only by a new writ; that is, the garnishor has to supply the employer with a new wage garnishment order in order to continue having the employee's pay garnished. The 90-day clock does not start running until payment on the writ has started.

What if there are multiple garnishments?

Most of the confusion surrounding wage garnishment occurs when an employer receives more than one garnishment for an employee. The general rule is "first in time, first in right." That is, the first garnishment order gets priority and gets paid first. If the first garnishment is taking the full amount allowed -- 25% -- then the second writ has to wait until the first writ expires (varies between states). However, if the first writ is nottaking the full 25%, then the employer must start paying on the second writ at the amount below 25% that is not being taken. One notable exception is for child support garnishments. These take priority over other garnishments, and will "bump" garnishments that are currently being paid.

How does the employer handle federal student loan garnishments?

There are special rules for federal student loans. Federal student loan garnishment orders are not subject to state law.

However, federal student loan garnishment orders are capped at 10% of income. Consequently, if another garnishment writ comes in while a federal student loan garnishment is being paid, the employer must begin paying on the second writ at 15% of income.

If the employee is being garnished on another writ at 25% when the federal student loan garnishment order comes in, the employer does not need to begin paying on the student loan garnishment. In that event, however, the employer should contact the agency that issued the student loan garnishment order, or contact the Department of Education student loan compliance center at (404) 562-6013 and follow up with a letter to:

U.S. Department of Education
Administrative Wage Garnishment Compliance Branch
61 Forsyth Street, Room 19T89
Atlanta Federal Center Tower
Atlanta, Georgia 30365.

The compliance center's advice will most likely be to begin paying on the student loan garnishment when the prior writ expires under state law.

How does the employer handle tax and child support garnishments?

Complications arise when IRS tax levies or child support garnishments conflict with each other or other wage garnishment orders. IRS tax levies and child support garnishments typically take priority over other garnishments, including federal student loan garnishments. An employer should contact the issuing agency (the IRS or the child support enforcement office) for advice specific to the type of garnishments in conflict. If questions remain, the employer should contact legal counsel to ensure that it is not later held liable to both the employee and the garnishor for failing to properly assign priority among claims or for over- or under-paying the garnishments.

Garnishments are an extra burden on an employer, but it is essential that they be dealt with correctly. Otherwise, an employer could be held liable both to the employee and the garnishor for any errors. However, seeking and taking advice can make most garnishments a routine part of personnel management. Finally, an employer should remember that, under federal and state law, an employee cannot be discriminated against or terminated because of wage garnishments.

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