How wage garnishments work and what HR must do

Executive overview

An employee's pay can be legally reduced to repay debts — without their employer's consent. HR receives a court order and is legally obligated to comply. Refusing is illegal.

The employer's role is purely mechanical: receive the order, calculate the correct deduction, withhold it, and communicate plainly.

What wage garnishments are

• A wage garnishment is a legal procedure requiring a portion of earnings to be withheld to repay a debt.
• It applies to disposable earnings — what remains after legally required deductions.
• Garnishable wages include salaries, hourly wages, commissions, bonuses, profit shares, and workers' compensation.
• Common reasons: child support, federal student loans, unpaid taxes, medical bills, credit card debt.
• The IRS can order garnishment directly; other creditors must first win a court judgment.

CCPA limits on garnishment amounts

• Title III of the Consumer Credit Protection Act (CCPA) caps how much can be withheld per pay period.
• The weekly garnishment cannot exceed the lesser of: 25% of disposable income, or the amount by which earnings exceed 30 times the federal minimum wage ($7.25/hr).
• At current minimum wage, no garnishment applies if weekly disposable earnings are $217.50 or less.
• Example: Greg earns $1,200/week disposable. 25% = $300, but 30 × $7.25 = $217.50 — so the cap is $217.50.
• State laws may set lower limits; always apply whichever limit is more protective.

Exceptions to the standard caps

• Child support, alimony, bankruptcy, and state/federal tax debts are exempt from the 25%/30x caps.
• Up to 50% of disposable earnings can be garnished for support if the worker supports another spouse or child.
• Up to 60% if the worker has no other dependents.
• If an order exceeds standard limits and you're unsure of its accuracy, consult an employment attorney.

How to talk to employees about garnishments

• Notify the employee factually: "I received this notice. Starting next paycheck, it will go into effect."
• Do not editorialize or express sympathy about the debt — stick to the facts.
• Garnishments are not a surprise to the debtor; they receive multiple warnings and dispute opportunities before a court order issues.
• The garnishment begins 5–30 business days after the court sends final notices to the employee and their bank.
• Be firm: you are legally required to comply with the court order.