What is a garnishment? When an employer receives an order
from a judicial or governmental agency requiring the employer to withhold
a certain sum from the wages of an employee for payment of a debt,
it is called wage garnishment. There are both federal and state laws
that apply to wage garnishments.
These laws set maximum amounts that can be garnished
from an employee’s paycheck, and the priority of certain types of
garnishments over others when an employer is faced with deductions
from an employee’s paycheck for more than one garnishment. In addition,
the Bankruptcy Code prohibits garnishment and tax levies once the
employee has filed for bankruptcy. An employer may not discharge an
employee because of wage garnishment “for any one indebtedness” in
order to prevent discrimination.
Employers must also take specific steps upon receipt
of a collection request from an outside agency, including answering
the order and calculating applicable exemptions.
A garnishment is an order of a court to
an employer (the garnishee) to withhold a sum of money from the earnings
of an employee (the debtor) for payment of a court- or agency-ordered
debt. There are numerous state and federal laws pertaining to the
procedure. Where state law is more restrictive than federal law (i.e.,
protects more of the employee's salary from garnishment), then state
law will govern.