Wage Garnishment and Family Support Withholding

1. Wage Garnishment andFamily Support Withholding What Supervisors Need to Know

2. Session Objectives • Understand the meaning of wagegarnishment and family support withholding • Recognize the requirements of relevant laws • Identify the organization’s responsibilities for handling these orders properly • Provide affected employees with accurate information about withholding procedures You will be able to: • Understand the meaning of wagegarnishment and family support withholding • Recognize the requirements of relevant laws • Identify the organization’s responsibilities for handling these orders properly • Provide affected employees with accurate information about withholding procedures

3. What Is Wage Garnishment? • Court or administrative order • Withholding from wages • Repayment of a debt

4. What Is Family Support Withholding? • Court order • Child support and/or alimony withholding from wages • Activated when employee is late with payments • Applies to both regular and temporary employees • Court order • Child support and/or alimony withholding from wages • Activated when employee is late with payments • Applies to both regular and temporary employees

5. Which Laws Govern? • Consumer Credit Protection Act • Social Security Act • Child Support Enforcement Act

6. Which Laws Govern? (cont.) • Debt Collection Improvement Act • Higher Education Act • State laws

7. What Are “Disposable Earnings”? • Wages minus required deductions • Deductions that aren’t required don’t count

8. Maximum Withholding Allowed for Debt • Lesser of: • 25% of weekly disposable earnings, OR • Disposable earnings minus (30 x federal minimum wage)

9. if not supporting another family Maximum WithholdingFor Family Support Max. Withholding60% Max. Withholding50% if supporting another family 65% and 55% if 12 weeks or more behind in payments

10. Maximum Withholding For Tax Liens • Garnishment order states amounts and how to calculate • Exemptions

11. Maximum Withholding For Administrative Orders • Up to 15% of employee’s weekly disposable earnings • Earnings/minimum wage formula • Sent within 10 days of payday • Multiple orders 15%

12. What Is the Effect Of Bankruptcy? • Protections • Exemptions • Duration

13. Garnishment and Family Support: Definitions • Garnishment: An order by a court or government agency requiring an employer to withhold a certain sum from a worker’s wages to repay a debt

14. Garnishment and Family Support: Definitions • Family support withholding: A court order requiring withholding to pay child support and/or alimony

15. Garnishment and Family Support: Definitions • Disposable earnings: What’s left of a worker’s weekly paycheck after legally required deductions are taken out

16. Garnishment and Family Support • Do you understand: • What garnishment and family support withholding are? • The laws that apply? • The maximum amounts that may be legally withheld from employees’ wages?

17. How to Determine Priority • Family support • Tax liens • Guaranteed student loans • Administrative orders for any other debt owed to U.S. government • Garnishment for consumer debt • First come, first served • Multiple withholding orders • Family support • Tax liens • Guaranteed student loans • Administrative orders for any other debt owed to U.S. government • Garnishment for consumer debt • First come, first served • Multiple withholding orders

18. How to Handle Withholding Orders • Never ignore garnishment or support orders • Discuss problems immediately with court or agency • Beware of official-looking documents from collection agencies • Consult an attorney • Withhold the allowed processing fee • Never ignore garnishment or support orders • Discuss problems immediately with court or agency • Beware of official-looking documents from collection agencies • Consult an attorney • Withhold the allowed processing fee

19. Other Important Steps Answer the order quickly Calculate the amount correctly Don’t withhold more than law allows Log the order Keep accurate records of payments 1 Answer the order quickly Calculate the amount correctly Don’t withhold more than law allows Log the order Keep accurate records of payments 2 3 4 5

20. What You Should NOT Do NOT • Retaliate against employees because of a garnishment order • Retaliate because of a family support order • Refuse to hire an applicant because of a support order

21. How Employees Can Avoid Garnishment • Talk to creditors and negotiate a payment plan • Contact the state consumer credit office • Make payments as agreed • Get financial counseling • Talk to creditors and negotiate a payment plan • Contact the state consumer credit office • Make payments as agreed • Get financial counseling

22. How to Reverse Garnishment • Claim an exemption • Pay the amount owed • Let the garnishment proceed and pay off the debt

23. Garnishment and Support Procedures: Q&A Q. • What should you do if you can’t honor a garnishment order? • Contact the court or agency and explain • What should you record about these orders? • Payments made, when, for whom, and to whom A. Q. A.

24. Garnishment and Support Procedures: Q&A Q. • How could an employee avoid garnishment? • Negotiate a payment plan with the creditor • Which orders always have top priority? • Family support orders A. Q. A.

25. Garnishment and Support Procedures • Do you understand the information presented in the previous slides?

26. Key Points to Remember! • Never ignore a wage garnishment or family support order • Respond promptly and withhold the correct amount • Keep a record of all orders and payments • Don’t discipline or fire employeesbecause of withholding orders • Help employees understand how they can avoid garnishment