In certain circumstances employers are obligated to deduct portions of wages from an employee’s paycheck to pay the employee’s debts, regardless of whether the employee wants to go along with the garnishment. However, the employee must be told of the garnishment and given a chance to protest.
Title III of the Consumer Credit Protection Act directs employers as to what must be done when an employee’s wages are garnished. This provision protects employees from discharge by their employers because their wages have been garnished for any one debt, and it limits the amount of earnings that may be garnished in any one week. However, the Act does not protect employees from discharge for subsequent wage garnishments.
Generally, the lesser amount of either 25 percent of disposable earnings or the amount by which the disposable earnings are greater than 30 times the federal minimum hourly wage may be garnished. Disposable earnings consist of the earnings left after legally required deductions, such as taxes and social security. Deductions not required by law, such as union dues and health or life insurance, are not subtracted from gross earnings for the purposes of wage garnishment.
If there is an existing court order for child support or alimony, different rules apply. In such matters, either 50 or 60 percent of an employee’s disposable earnings may be garnished, depending on whether the employee is supporting a current spouse or child, in which case the lesser amount may be garnished. An additional five percent may be garnished if the payments are over 12 weeks in arrears.
Violations of Title III may result in reinstatement of a discharged employee, payment of back wages, and restoration of improperly garnished amounts. Further, where violations are willful, violators may be criminally prosecuted and fined up to $1,000, or imprisoned for one year, or both. If a state wage garnishment law creates a different result than the federal law, the employer must observe the law resulting in the smaller garnishment, or prohibiting the discharge of an employee where earnings have been subject to garnishment for more than one debt.