Wage garnishment in US payroll law describes a legal procedure where one’s earnings are withheld by an employer according to a court order to pay a debt or legal obligation. Garnishments are usually a percentage of an employee’s compensation rather than a dollar amount.
A few examples of wage garnishment include: child support, unpaid taxes or credit card debt, defaulted student loans, medical bills, and outstanding court fees.
How are payroll wage garnishments issued?
When employers receive a garnish order, they’ll need to respond to the order, send proof of worker employment, and repost their earnings. The court may also ask the employer to send additional information before garnishing. Only an employee’s disposable income can be garnished.
Most creditors must provide a court order to garnish wages. Federal law stipulates how much employers can take from an employee’s paycheck. The amount of garnishment pay is based on the employee’s disposable earnings (funds left over after taxes, social security, Medicare, and so on).
Which wages can be garnished?
Most wages can be garnished, including:
- Hourly wages
- Salaries
- Bonuses
- Commissions
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