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What is a garnishment?
A garnishment is a court order directing that money or property of a third party (usually wages paid by an employer) be seized to satisfy a debt owed by a debtor to a plaintiff creditor.
When added to payroll, Check will process employee garnishments, in accordance with the input requirements.
When is a garnishment allowed?
A garnishment may be requested when a debt has gone unpaid. The employer will receive a detailed document explaining the amount owed and the employee affected. This method requires that the employee’s employer withhold the unpaid amount from the employee’s wages and remit to the garnishing agency in a timely fashion.
Garnishments may include child support withholding orders, tax levies, student loans repayment orders, or creditor garnishments.
An employer’s responsibility for the garnishment stops once the full amount has been withheld or if the employee ceases employment. An employer may not terminate an employee for receiving a garnishment.
How does Check support garnishments?
Check automates support for child support garnishments.
To configure, we collect the garnishment’s case number, agency, issue date, per pay period amount, and maximum amount of disposable earnings, which are all available on the garnishment notice. We also ask for an effective start date to mark when this garnishment should apply to the employee. For each regular payroll after this date we deduct the per pay period amount or the max amount of disposable income from the employee’s wage. An employee may have multiple active child support orders at once. If deducting for all orders in full would exceed the allowable amount to garnish, we will partially apply all deductions according to the Administration for Children and Families (ACF) rules.
How are garnishments calculated?
Garnishments are a post-tax deduction, which may be applied as a flat dollar amount, or as a percentage of disposable earnings. Some garnishments may have a total owed, but most are considered recurring until a notice of termination is received.
Disposable earnings are determined by subtracting all deductions required by law from an employee’s gross earnings (wages, commissions, bonuses, sick pay, and periodic pension payments). Deductions required by law include all taxes (federal, state, or local income tax, social security or medicare (FICA), state unemployment, or disability tax). Voluntary deductions, (health, dental, vision, life insurance premiums, union dues, and retirement plan contributions(401k)) are not subtracted from earnings when calculating disposable earnings.
Multiple garnishments may be added to an employee as long as the employee is never overwithheld. In the case of multiple garnishments, child support takes priority followed by federal levies. All other withholding orders are entered as received.
Federally mandated garnishment limits
The federal garnishment maximum applies no matter how many garnishments are received for an employee. If the maximum is already being withheld when a second garnishment is received, nothing may be withheld for the second garnishment.
There is a limit on the amount that can be garnished. The Consumer Credit Protection Act (CCPA) states that the maximum amount of an employee’s “disposable earnings” that can be garnished to repay a debt is the lesser of:
25% of the employee’s disposable earnings for the week; or
The amount by which the employee’s disposable earnings for the week exceed 30 times the federal minimum hourly wage then in effect.
Amount subject to garnishment
Weekly | Biweekly | Semimonthly | Monthly |
$217.50 or less: NONE | $435.00 or less: NONE | $471.25 or less: NONE | $942.50 or less: NONE |
More than $217.50 but less than $290.00: Amount ABOVE $217.50 | More than $435.00 but less than $580.00: Amount ABOVE $435.00 | More than $471.25 but less than $628.33: Amount ABOVE $471.25 | More than $942.50 but less than $1256.66: Amount ABOVE $942.50 |
$290.00 or more: MAXIMUM 25% | $580.00 or more: MAXIMUM 25% | $628.33 or more: MAXIMUM 25% | $1256.66 or more: MAXIMUM 25% |
If more than the maximum is withheld and the employee receives less than the required minimum wage because of the excess withholding, the employer may be subject to penalties for violating the Fair Labor Standards Act.
Child support garnishment limits
Most child support orders will specify a flat dollar amount to be withheld each pay cycle. The following maximums also apply.
Maximum amount for child support
50% of the employee’s “disposable earnings” if the employee is supporting another spouse and/or children
55% of the employee’s “disposable earnings” if the employee is supporting another spouse and/or children (AND 12 weeks late in payment or in arrears)
60% of the employee’s “disposable earnings” if the employee is not supporting another spouse and/or children
65% of the employee’s “disposable earnings” if the employee is not supporting another spouse and/or children (AND 12 weeks late in payment or in arrears)
What's Next?
Check out our Integrated Payroll Master Guide!