Wage Garnishment — How Much Can Be Taken? In Plain Words

What a wage garnishment is

DOL’s Fact Sheet #30 defines it this way: “A wage garnishment is any legal or equitable procedure through which some portion of a person’s earnings is required to be withheld for the payment of a debt.”

The fact sheet adds: “Most garnishments are made by court order. Other types of legal or equitable procedures for garnishment include IRS or state tax collection agency levies for unpaid taxes and federal agency administrative garnishments for non-tax debts owed to the federal government.”

DOL’s garnishment topic page words the definition with the court-order part built in: “Wage garnishment is a legal procedure in which a person’s earnings are required by court order to be withheld by an employer for the payment of a debt such as child support.”

Fact Sheet #30 also states what a wage garnishment is not: “Wage garnishments do not include voluntary wage assignments – that is, situations in which employees voluntarily agree that their employers may turn over some specified amount of their earnings to a creditor or creditors.”

The federal limit: the lesser of two figures

Fact Sheet #30 states the maximum this way: “The wage garnishment provisions of the CCPA set the maximum amount that may be garnished in any workweek or pay period, regardless of the number of garnishment orders received by the employer. For ordinary garnishments (i.e., those not for support, bankruptcy, or any state or federal tax), the weekly amount may not exceed the lesser of two figures: 25% of the employee’s disposable earnings, or the amount by which an employee’s disposable earnings are greater than 30 times the federal minimum wage (currently $7.25 an hour).”

The $7.25 figure is printed here exactly as DOL’s fact sheet states it, and DOL attributes it as the current federal minimum wage.

In plain words, the federal test for an ordinary garnishment has two parts, and the smaller result is the most that may be taken:

• Figure one: 25% of disposable earnings.
• Figure two: the amount by which disposable earnings are greater than 30 times the federal minimum wage.

Fact Sheet #30 also states the weekly results of that test at the current figure DOL prints: “Therefore, if the pay period is weekly and disposable earnings are $217.50 ($7.25 × 30) or less, there can be no garnishment. If disposable earnings are more than $217.50 but less than $290 ($7.25 × 40), the amount above $217.50 can be garnished. If disposable earnings are $290 or more, a maximum of 25% can be garnished. 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.”

What “disposable earnings” means

Fact Sheet #30 says: “The amount of pay subject to garnishment is based on an employee’s ‘disposable earnings,’ which is the amount of earnings left after legally required deductions are made. Examples of such deductions include federal, state, and local taxes, and the employee’s share of Social Security, Medicare and State Unemployment Insurance tax. It also includes withholdings for employee retirement systems required by law.”

The fact sheet then states the other side of that line: “Deductions not required by law – such as those for voluntary wage assignments, union dues, health and life insurance, contributions to charitable causes, purchases of savings bonds, retirement plan contributions (except those required by law) and payments to employers for payroll advances or purchases of merchandise – usually may not be subtracted from gross earnings when calculating disposable earnings under the CCPA.”

In plain words: disposable earnings are what is left after only the deductions the law requires are taken out. Deductions the law does not require usually do not lower that amount.

What “earnings” means

Fact Sheet #30 states: “The CCPA defines earnings as compensation paid or payable for personal services, including wages, salaries, commissions, bonuses, and periodic payments from a pension or retirement program. Payments from an employment-based disability plan are also earnings.”

DOL’s garnishment topic page says the same coverage point this way: “Title III applies to all individuals who receive personal earnings and to their employers. Personal earnings include wages, salaries, commissions, bonuses, and income from a pension or retirement program, but does not ordinarily include tips.”

Fact Sheet #30 gives the tip rule in more detail: “For employees who receive tips, the cash wages paid directly by the employer and the amount of any tip credit claimed by the employer under federal or state law are earnings for the purposes of the wage garnishment law. Tips received in excess of the tip credit amount or in excess of the wages paid directly by the employer (if no tip credit is claimed or allowed) are not earnings for purposes of the CCPA.”

DOL’s own examples

Fact Sheet #30 ends with examples that, in DOL’s words, “illustrate the statutory tests for determining the amounts subject to garnishment, based on the current federal minimum wage of $7.25 per hour.” Two of DOL’s examples are printed here, in DOL’s own figures. They are DOL’s illustrations of its test — not a way to work out any one person’s garnishment.

DOL’s first example: “An employee’s gross earnings in a particular week are $263. After deductions required by law, the disposable earnings are $233.00. In this week, $15.50 may be garnished, because only the amount over $217.50 may be garnished where the disposable earnings are less than $290.”

DOL’s third example: “An employee receives a bonus in a particular workweek of $402. After deductions required by law, the disposable earnings are $368. In this week, 25% of the disposable earnings may be garnished. ($368 × 25% = $92).”

Child support and alimony: different limits

Fact Sheet #30 states: “The wage garnishment provisions of the CCPA also limit the amount of earnings that may be garnished pursuant to court orders for child support or alimony. The garnishment law allows up to 50% of a worker’s disposable earnings to be garnished for these purposes if the worker is supporting another spouse or child, or up to 60% if the worker is not. An additional 5% may be garnished for support payments more than 12 weeks in arrears.”

So the support limits DOL states are higher than the 25% figure for ordinary garnishments, and they turn on whether the worker is supporting another spouse or child, and on whether support payments are more than 12 weeks in arrears.

Cases where the general limits do not apply

Fact Sheet #30 states: “The wage garnishment law specifies that its limitations on the amount of earnings that may be garnished do not apply to certain bankruptcy court orders, or to debts due for federal or state taxes.”

The fact sheet states the same point in its general-limits section: “these limitations do not apply to certain bankruptcy court orders, or to garnishments to recover debts due for state or federal taxes, and different limitations apply to garnishments pursuant to court orders for child support or alimony.”

Non-tax debts owed to federal agencies

Fact Sheet #30 states: “The Debt Collection Improvement Act authorizes federal agencies or collection agencies under contract with them to garnish up to 15% of disposable earnings to repay defaulted debts owed to the U.S. government. As of December 20, 2018, the Higher Education Act authorizes the Department of Education’s guaranty agencies to garnish up to 15% of disposable earnings to repay defaulted federal student loans.”

The fact sheet adds: “Such withholding is also subject to the wage garnishment provisions of the CCPA, but not state garnishment laws. Unless the total of all garnishments exceeds the CCPA’s limits on garnishment, questions regarding such garnishments should be referred to the agency initiating the withholding action.”

Job protection: you cannot be fired for one debt

Fact Sheet #30 states: “The CCPA prohibits an employer from firing an employee whose earnings are subject to garnishment for any one debt, regardless of the number of levies made or proceedings brought to collect that one debt.”

DOL’s garnishment topic page states the same protection, and states its limit: “Title III protects employees from being discharged by their employers because their wages have been garnished for any one debt and limits the amount of employees’ earnings that may be garnished in any one week. It does not, however, protect an employee from discharge if the employee’s earnings have been subject to garnishment for a second or subsequent debts.”

In plain words: garnishment for one debt is protected — an employer may not fire the worker for it, no matter how many levies or proceedings are brought to collect that one debt. DOL states that the protection does not extend to garnishment for a second or subsequent debt.

Who runs this, and where it applies

Fact Sheet #30 states: “The CCPA limits the amount of an individual’s earnings that may be garnished and protects an employee from being fired if pay is garnished for only one debt. The U.S. Department of Labor’s Wage and Hour Division administers the wage garnishment provisions of the CCPA, which apply in all 50 states, the District of Columbia, and all U.S. territories and possessions. The wage garnishment provisions of the CCPA protect everyone who receives personal earnings.”

DOL’s Wage and Hour Division page on federal wage garnishments states it the same way: “The wage garnishment provisions of the Consumer Credit Protection Act (CCPA) protect employees from discharge by their employers because their wages have been garnished for any one debt, and it limits the amount of an employee’s earnings that may be garnished in any one week. CCPA also applies to all employers and individuals who receive earnings for personal services (including wages, salaries, commissions, bonuses and income from a pension or retirement program, but ordinarily not including tips).”

Fact Sheet #30 also states the limit of the Wage and Hour Division’s role: “The Wage and Hour Division has authority to enforce against employers the limits on the amount that may be garnished and the protections from termination because of garnishment for any single debt. Questions relating to other garnishment issues should be directed to the court or agency initiating the garnishment action. For example, questions regarding the priority given to certain garnishments over others are not matters covered by the wage garnishment provisions of the CCPA and may be referred to the court or agency initiating the action. The CCPA contains no provisions controlling the priorities of garnishments, which are determined by state or other federal laws. However, in no event may the amount of any individual’s disposable earnings that may be garnished exceed the percentages specified in the CCPA.”

If a state law is different

Fact Sheet #30 states DOL’s rule for a difference between state law and the federal provisions: “If a state wage garnishment law differs from the wage garnishment provisions of the CCPA, the law resulting in the lower amount of earnings being garnished must be observed.”

That is the only state point this page makes, and it is DOL’s own statement. States have their own garnishment laws, and this page does not state them.

What this page does not cover

This page covers only what the three DOL sources below say about the federal wage garnishment limits in general. It does not cover any one state’s garnishment rule, the order in which different garnishments are paid, or any one person’s garnishment. DOL’s fact sheet directs questions about other garnishment issues to the court or agency that started the garnishment action.