Guide to Wage Garnishment and Common Garnishment Types

December 4, 2023
Wage Garnishment

You’ve Received a Wage Garnishment Notice–Now What?

So, you’ve just received a wage garnishment notice. Now what? For business owners and HR leaders, a wage garnishment can cause confusion regarding procedures and paperwork. We’ve answered the most important questions HR professionals need to know to navigate the wage garnishment process successfully.

Can you stop a garnishment once it starts?

Once you’ve received a garnishment, you have a few options. However, you must act fast. If you wait too long to challenge the garnishment, you’ll lose the ability to contest the debt in court. In some states, individuals only receive five business days to contest the ruling. Here are a few situations in which you may be able to stop the garnishment:

  • You weren’t legally notified of the garnishment
  • The notice contains inaccurate information about you or your debt
  • You only receive exempt income, such as Social Security or veterans benefits

A personal loan is another potential way to stop the garnishment. Using a personal loan to pay off the debt will stop long-term garnishments from your paycheck. Of course, you’ll still be responsible for the personal loan. However, this removes your employer from the equation and restores your control over your income.

How much money can be garnished from a paycheck?

Creditors can take a percentage of your weekly disposable income. According to the Department of Labor, “if the pay period is weekly and disposable earnings are $217.50 ($7.25 × 30) or less, there can be no garnishment.”

However, if disposable earnings are more than $290, 25 percent can be garnished, which is the absolute maximum. When pay periods cover more than one week, multiples of the weekly restrictions must be used to calculate the maximum amounts that may be garnished.

Can you negotiate a wage garnishment?

Before accepting your fate, contact your creditors first. Many creditors are open to negotiating a payment plan. Those facing a garnishment should figure out what they can pay based on what they owe and use their power to negotiate.

Depending on the type of debt, not all will be receptive. However, it’s always worth a conversation.

Are garnishments public record?

A wage garnishment will be noted on your credit report for up to seven years, which will impact your credit score and show up in public records. Anyone who searches for this information will have access as a federal court order was given to garnish your wages.

Banks and other financiers can access this information if you attempt to apply for a loan or rent a home. A wage garnishment can negatively impact your ability to do these things for up to seven years until the garnishment drops off your record.

It’s critical to pay your debts and avoid a wage garnishment whenever possible. In addition to the adverse effects on your credit, employers also take a hit. Wage garnishments mean more paperwork and a larger administrative burden for the employer.

Understanding these common questions will help employers and HR leaders navigate the wage garnishment process when they receive a notice. Being prepared will help cut down the confusion and orchestrate the process smoothly.

5 Types of Wage Garnishments

Government agencies and court orders can require employers to garnish an employee’s wages to collect unpaid debts or financial responsibility. Federal and state tax agencies will impose a levy on an employee’s wages for outstanding tax balances. There are five types of wage garnishments that employers can receive.

Federal Wage Garnishments

Wage garnishments are ranked in order of importance. Federal debts must be paid first, except if there is a Child Support garnishment in place. State wage garnishments are issued after all federal debt is repaid.

Child Support

Child support is the first priority for wage garnishments. As a federal tax obligation, employment income must first satisfy child support requirements. The law orders automatic wage withholding for family support orders, spousal support, and alimony.

Employers must notify the employee once a wage garnishment is issued. They must also state the amount that will be withheld from each paycheck.

Federal Student Loans

If an individual defaults on a federal student loan, the government has the right to garnish up to 15 percent of the student’s wages. Since the U.S. Department of Education issues federal student loans, they are treated as other federal debts. The borrower will be notified 30 days prior to garnishments. Federal student loans are next in importance after child support.

State Wage Garnishments

After all federal debt is settled, state tax agencies are eligible to collect any unpaid debt.

State Income Taxes

If you fail to file a tax return or incorrectly report income, you may be subject to wage garnishments. Citizens who do not pay owed state taxes can face garnishments up to 15 percent of wages until the debt is repaid– varies by employee’s work state.

Credit Cards and all Other Debt

Once federal and state tax levies are taken care of, private organizations have the right to garnish a borrower’s wages. This typically comes in the form of credit card and other debt.

Other liabilities may include medical bills, personal loans, or other unpaid consumer obligations.

When it comes to consumer debt, the order in which it is retrieved is based on the date the debt was acquired. The earliest debt must be paid first. Garnishments continue in order of the time received. The amount that can be garnished from the employee’s wages varies by the employee work state.

Contact your legal advisor to learn more about your wage garnishment obligations for your work state locations.

Garnishment Administrative Fees by State

Many states permit an employer to withhold a fee to compensate for the administrative cost of processing a garnishment order, as long as it complies with the CCPA limit.

For more information on state specific rules, see below.

Federal: None. But the application of state or locally authorized administrative fees must not reduce a worker’s earnings below the minimum wage or overtime pay required by the FLSA.

Alabama: Up to $2 each month for support withholding, deducted from worker’s income.

Alaska: $5 for each support payment, deducted from the worker’s remaining wages.

Arkansas: Up to $ 2 .50 each pay period for support withholding, deducted from the worker’s remaining wages.

California: Employers may deduct $ 1 .50 for each support payment from the employee’s earnings.

Connecticut: Employers may deduct up to $5 each month for support withholding from the employee’s remaining wages.

Colorado: None identified.

Delaware: None identified.

Florida: Employers may deduct up to $5 for the first, and $2 for each later support payment from the employee’s remaining wages.

Georgia: Employers may deduct up to $25 for the first, and $3 for each later support payment from the employee’s remaining income.

Hawaii: Employers may deduct up to $25 for the first, and $3 for each later support payment from the employee’s remaining income.

Idaho: Employers may deduct up to $5 for each support payment from the employee’s remaining income.

Illinois: Employers may deduct:

  • 2% of the amount garnished from the employee’s remaining wages.
  • $12 for each wage assignment, credited against the employee’s outstanding debt.
  • Up to $5 each month for support withholding from the employee’s remaining income.

Indiana: Employers may deduct:

  • $2 for each support payment from the employee’s remaining disposable earnings, and
  • $12 or 3% of the total deduction for a single debt. If 3%, the employer deducts half from the employee’s remaining income and half from the amount withheld for the creditor. Collection may be in lump sum or pro rata over all affected pay periods.

The same fee is available for state tax debt withholding, but is paid entirely by the employee.

Iowa: Up to $2 each month for support withholding.

Kansas: Up to $10 for each pay period or $20 for each 30-day period. If the fee causes the total withholding to exceed the statutory limit, the fee is instead deducted from the amount withheld.

Up to $5 for each pay period or $10 for each 30-day period for support withholding. If withholding is from a lump sum payment, the employer may charge an additional $10 fee.

Kentucky: $1 for each support withholding payment.

Maine: For wage garnishment, $3 for each pay period deducted from the employee’s remaining nonexempt income.

Maryland: For wage garnishments, $1 for each payment deducted from the amount withheld for the creditor. $2 for each support payment, deducted from the employee’s wages.

Massachusetts: $2 for each support payment, deducted from the worker’s remaining wages.

Michigan: Employers may deduct up to $1 each pay period for support withholding from the employee’s earnings.

Minnesota: Creditors must pay employers a $35 fee for each garnishment served.

For support orders, if the employer submits withholdings electronically, it may collect a fee of $1 for each payment, up to $2 each month, from the employee’s remaining wages. If withholdings are not submitted electronically, $2 for each payment, up to $4 each month.

Mississippi: Employers may deduct up to $1 for each support payment from the employee’s remaining wages.

Creditors must provide a $15 fee when serving summons and order of garnishment.

Missouri: $2 for each intrastate support payment, deducted from the employee’s remaining income (fees for interstate withholding are governed by the state where the employee works).

A monthly fee up to $15 on behalf of the state, deducted from the employee’s income.

Montana: Up to $20 for answering garnishment interrogatories, deducted from the employee’s other nonexempt wages. Employers may move for additional costs. For support orders, up to $6 each month, deducted from the employee’s other wages.

Nebraska: Up to $5 each month for support withholding.

Nevada: For support orders, up to $ 2 .50 each month (set by the court), deducted from the amount withheld.

New Hampshire: $3 for each support payment, deducted from an employee’s wages.

New Jersey: $1 for each medical support withholding, deducted from the employee’s remaining wages.

New Mexico: $1 for each support payment, deducted from the employee’s remaining wages.

For other garnishment orders, 5% deducted from each payment to a creditor.

New York: $1 for each support payment, deducted from the employee’s income.

The court awards employers their actual costs and reasonable attorneys’ fees for the employer’s response in garnishment proceedings.

North Carolina: None identified.

North Dakota: $1 or $2 (depending on the type of withholding) for each child support payment, deducted from the employee’s remaining income.

Ohio: $3 each month for child support withholdings, deducted from the employee’s income.

Creditors must include a $25 fee when serving a garnishment order.

Oklahoma: For support withholdings, $2 or 1% of the amount withheld (whichever is greater), deducted from the employee’s remaining wages.

For other orders, up to $3 each pay period, deducted from the employee’s remaining disposable earnings.

Oregon: Up to $5 each pay period, but not more than $10 each month, for support withholdings, deducted from the employee’s wages.

$10 for answering a garnishment summons, deducted from the employee’s wages.

Pennsylvania: A one-time fee of $50 for support withholding, deducted from the employee’s income.

Up to $5 for withholdings for residential lease debt, taken from the amount collected.

Rhode Island: $5 for each garnishment order, deducted from the employee’s wages.

$2 for each support withholding, deducted from the employee’s remaining wages.

South Carolina: $3 for each child support withholding, deducted from the employee’s remaining wages.

South Dakota: Up to $3 each month for support withholding, deducted from the employee’s remaining wages.

$15 from creditors for each garnishment order.

Tennessee: Up to 5% (presumably of the amount withheld) but not more than $5 each month for support withholding, deducted from the employee’s remaining wages.

Texas: Employers may deduct from the employee’s disposable earnings:

  • Student loan debt withholding: the lesser of $10/ month or the actual administrative cost.
  • Child support: up to $10/ month .
  • Spousal support: up to $5/month.

Utah: For wage garnishment generally, $10 for each single garnishment and $25 for each continuing garnishment, as a one-time fee from creditors.

$25 one-time fee for support withholding, deducted (as a lump sum or incrementally) from the employee’s remaining income.

Vermont: Up to $5 each month for support withholding, deducted from employee’s wages.

Virginia: Up to $10 for each garnishment summons, deducted from employee’s remaining income.

Washington: Up to $20 for the first and $10 for the second answer to a continuing garnishment order from employee’s remaining earnings ($20 from creditors for each non-continuing order). Up to $10 for the first and $1 for each later support payment from employee’s remaining earnings (even if the remainder of earnings is exempt).

West Virginia: Up to $1 for each support withholding, deducted from the employee’s remaining income.

Wisconsin: Up to $3 for the actual cost of each support payment, deducted from the employee’s remaining income.

Wyoming: $5 for each support payment, deducted from the employee’s remaining income.

What are the Rules for Calculating Garnishment Maximums?

Below, you’ll find information on Federal and state rules for garnishments. Use these rules when calculating a employee’s per-paycheck garnishment amount.

Federal Minimum Wage Rule = Amount of disposable income in excess of 30 (hours) X the Federal Minimum Wage, OR the Employee State or Local Minimum if greater than the Federal Minimum Wage

  • MINIMUM WAGE RULE (number of hours used for that state)
  • The state minimum wage
  • Exempt wages per week. See these instructions for converting weekly amounts for employees paid by bi-weekly, semi-monthly, or monthly schedule.
  • Percentage maximums by type of garnishment
    • Child Support
    • Tax Levies
    • Creditor Garnishment
    • Spousal Support
    • Student Loan
  • State-specific exceptions or rules, if any
  • Information about the admin fee and employer fee.

Sequencing and prioritizing wage garnishment orders

When an employee who lives in any state other than Mississippi has multiple wage garnishments at the same time, the garnishments are prioritized by type. Here are the priorities for each type in all states except Mississippi.

  1. Child support
  2. Chapter XIII bankruptcy
  3. IRS tax levies
  4. Federal agencies other than the IRS
  5. State tax levies
  6. Local tax levies
  7. Consumer (creditor) debt
  8. Student loans

What Is a Case Identifier for Child Support Garnishments?

The case identifier, or CSE Case Number, is a unique number on every court-ordered garnishment. This is often printed on the very first page of the order.

Please note: Entering an incorrect case number may result in payments being applied incorrectly by the state. If you have entered an incorrect case number, you should consider contacting the state immediately to ensure any previous payments have not been incorrectly applied, and correct the information with your payroll provider.

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