Employer Responsibility in Wage Garnishment – What Employers Need to Know

Wage garnishment can be a complex and confusing process. Federal and state laws, nuances in prioritizing debts, and other issues complicate compliance. Employers must know their responsibility to implement wage garnishments and comply with orders. They can also work with a professional to ensure their procedures and processes are compliant.


What is wage garnishment? Wage garnishment is one of the tools creditors or debt collectors, use to collect on unpaid debt. A creditor can file a garnishment order with the court, which requires your employer to deduct a portion of your disposable earnings — the amount left after deductions for taxes and mandatory charges for services like Social Security.

The amount of your disposable earnings that can be garnished depends on the type of debt and your state’s laws. In most cases, your disposable incomes include any cash wages you receive directly from your employer plus any tip credits allowed or claimed by your employer under federal or state law.

You may be able to challenge your wage garnishment if you believe it was issued in error or was made because of financial hardship. You can do this by submitting a notice to the court and requesting a hearing.

You can also pay off your debt through other means, such as a loan or filing for bankruptcy. However, you should know that the judgment on your credit report will remain on your record until it is completely paid or arrangements are made to absolve it.


Whether you’re an employer or a creditor, the law requires that you comply with any wage garnishment court order. Failure to do so can result in fines and other penalties that can hurt your business significantly.

Garnishments are a legal procedure that allows creditors to seize some of an employee’s wages or bank accounts to pay off debts, such as taxes, child support, alimony, or federal student loans. The process begins with a creditor getting a court judgment, followed by paperwork directing your employer to withhold money from your paycheck until the debt is satisfied.

In most cases, the court order will detail how much of an employee’s disposable earnings are subject to garnishment and what methods are used for calculating it. The amount an employer must withhold varies from state to state and by type of debt.

Some states have higher maximum amounts than those required by federal law, while others have stricter limits. Federal garnishment limits range from 10% of disposable earnings up to a percentage of gross revenues.

In addition to the federal wage garnishment limits, some states prohibit wage garnishment altogether. These restrictions are under Title III of the Consumer Credit Protection Act (CCPA). The CCPA limits how much of an individual’s disposable earnings can be garnished and protects employees from being fired for having one or more garnishments on their records.

State Laws

The laws that govern employer responsibility in wage garnishment vary by state. Still, they all cover the process and require employers to follow specific guidelines to ensure payments are sent correctly. These laws also make it illegal for an employer to fire an employee for receiving a wage garnishment order.

A creditor can begin garnishing an employee’s wages by filing a lawsuit in court. If the case wins, the creditor can receive a money judgment against the employee that a judge orders to be paid. This judgment may also include interest and court fees.

Employers should know their legal responsibilities in this area and communicate with employees about how to pay the debt. Many states have a standard form that can be used to notify employees about receiving wage garnishments.

The amount of wages that can be garnished depends on the type of debt and the state where the employee lives. New York limits the earnings an employer must withhold from each paycheck to 10 percent of gross wages or 25 percent of disposable income, which is the employee’s earnings left over after legally mandated deductions like federal and state taxes, Social Security, and medical insurance.

The garnishment can continue until the employee pays the debt, leaves the job, or files for bankruptcy. However, how long the garnishment lasts varies from state to state and debt type to debt type.

Federal Laws

A creditor can file a writ of garnishment in court, and the judge may order that your employer withhold a portion of your wages to pay off your debt or cover other legal obligations. Examples include past due child support or alimony, back taxes, defaulted student loans, and other consumer debts.

However, the amount of an employee’s earnings that can be garnished depends on the state where they live and the type of debt involved. Most states limit the percentage of an individual’s disposable income that can be trimmed to 25 percent or the amount by which their disposable earnings exceed 30 times the federal minimum wage measured every week, whichever is less.

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