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. Garnishments are usually 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.
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.
Payroll garnishments
A court issues payroll garnishments as an order requiring an employer to withhold a certain amount from any employee’s check. It is sent directly to the original person owed the money until the debt is paid in full.
Creditor garnishments
These are also a private creditor attempt to collect on a debt. If they are unable to collect the debt from the consumer then they have the right to sue. If they win, the creditor will be able to serve an income deduction order to your employer with a court order garnishing payments toward the debt. Receipt of the garnishment by the employer obligates the employer to notify you of it, withhold the wage as court ordered and send the money to the creditor.
Child Support and Alimony
Child support payments may take up to 50% of disposable earnings. If the employee is not supporting a dependent such as a child or a spouse then 60% can be taken If he or she is more than 12 weeks in arrears on paying child support then rates go up to 55/65% respectively.
Student Loans
These are subject to 15% of your compensation to repay a debt of student loans. A lawsuit is not required to obtain for wage garnishments for failure to repay this type of loan.
Tax Debt
The IRS determines the amount owed to them based on current standard deduction, dependents claimed and income reported to them by the employer. The IRS does not require a court order or judgment first and will deliver a notice before they begin seizing money.
Note to Employers: An employee cannot be terminated, disciplined or retaliated against for an employee garnishments.
Call Massey and Duffy for a free consultation today if you have been treated unfairly by your employer for a garnishment.