If your employee has voluntarily signed a contract or wage assignment with a creditor to pay a specific amount as a payroll deduction, then the deduction is not a garnishment for purposes of the Consumer Credit Protection Act, and the garnishment limits do not apply. State law may limit wage agreements.
Federal and state laws place limits on the amount of an employee’s disposable income that can be garnished in a work week. State laws take precedence if they have stricter garnishment limitations.
- The Federal Consumer Credit Protection Act limits garnishments to 25% of disposable income, or the amount by which the disposable income exceeds 30 times the federal minimum hourly wage, whichever is less.
- A greater amount of an employee’s wages may be garnished for child/spousal support, bankruptcy, and federal or state tax levies.
- Up to 50% of an employee’s disposable earnings may be garnished for child support if the employee is supporting a current spouse or child who is not the subject of the support order, and up to 60% if the employee is not supporting a current spouse or child. An additional 5% may be garnished for support payments over 12 weeks in arrears.
For for more information about garnishment limits, see the U.S. Department of Labor Fact Sheet about the federal wage garnishment law.