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Training For Arkansas Garnishment Law Requirements

What Is A Garnishment?

A wage garnishment is any legal or equitable procedure through which some portion of a person's earnings is required to be withheld by an employer for the payment of a debt. The six basic types of garnishments are child support, federal, state, or local levies, creditor garnishments, and student loans, with the largest amount of garnishments being for child support.

Arkansas Garnishment Law Requirements

Arkansas employers that receive a wage garnishment must comply with Arkansas garnishment laws as well as applicable federal requirements. Arkansas provides specific exemptions for employee wages and establishes procedures that employers must follow after receiving a writ of garnishment. The rules can vary depending on the type of debt and whether the garnishment involves ordinary consumer debt, child support, taxes, bankruptcy, or another obligation.

Arkansas Wage Garnishment Overview

In Arkansas, wage garnishment generally involves a writ of garnishment served on an employer that owes wages, salary, commissions, or other compensation to a judgment debtor. Arkansas law permits a creditor who has obtained a judgment to seek a writ of garnishment to reach property or money owed to the judgment debtor.

Once an employer is served with a wage garnishment, the employer becomes the garnishee and must hold nonexempt wages subject to the order of the court. Under Arkansas Code § 16-110-415, the judgment or balance due becomes a lien on wages due at the time of service and may continue to attach to subsequent earnings until the judgment is paid or otherwise satisfied.

Arkansas Wage Exemptions

Arkansas provides specific protections for wages under Arkansas Code § 16-66-208. The statute provides that the first $25 per week of the net wages of laborers and mechanics is absolutely exempt from garnishment or other legal process without the employee having to file a schedule of exemptions.

For purposes of this exemption, "net wages" means gross wages less amounts actually withheld by the employer for Arkansas income tax, federal income tax, Social Security, group retirement, group hospitalization insurance premiums, and group life insurance premiums.

Arkansas law also provides a potentially broader exemption for laborers and mechanics who file the required sworn statement with the court. If the statutory requirements are satisfied, up to 60 days of wages may be claimed as exempt, subject to the limitations and procedures established by Arkansas law.

Claiming the 60-Day Wage Exemption

An employee who seeks the broader wage exemption must file a sworn statement with the court from which the garnishment was issued. The statement must establish that the 60 days of wages claimed as exempt are less than the amount otherwise available under the Arkansas constitutional exemption and that the employee does not own sufficient other personal property that, together with the 60 days of wages, would exceed the applicable exemption limit.

If a creditor disputes the exemption claim, Arkansas law provides a procedure for requesting a hearing. If the court sustains the exemption claim, the employee's wages generally cannot again be seized by garnishment or other legal process for a period of 60 days.

Employers should not independently determine whether an employee qualifies for the 60-day exemption. Payroll should follow the garnishment order and any instructions or determinations issued by the court.

Calculation of Net Wages

For the $25-per-week statutory exemption applicable to laborers and mechanics, Arkansas defines net wages as gross wages less the deductions actually withheld by the employer for Arkansas income tax, federal income tax, Social Security, group retirement, group hospitalization insurance premiums, and group life insurance premiums.

This statutory definition is different from the federal definition of disposable earnings used for calculating the maximum amount that may be garnished under the Consumer Credit Protection Act. Employers should therefore perform the applicable Arkansas and federal calculations rather than assuming that one definition automatically applies to every garnishment.

Arkansas Garnishment Process and Employer Response

Arkansas garnishment procedures are primarily governed by Arkansas Code Title 16, Chapter 110. A writ of garnishment may be issued to reach wages or other property belonging to a judgment debtor that is in the possession or control of the garnishee.

The writ served on an employer must contain a specific notice advising the employer that failure to answer within 30 days or failure to answer the attached interrogatories may result in a judgment against the employer for the amount of nonexempt wages owed to the employee on the date the writ was served.

Arkansas Code § 16-110-404 requires the garnishee to file full, direct, and truthful answers to the allegations and interrogatories on the return day stated in the writ. Arkansas Code § 16-110-407 provides that failure to answer within 30 days can expose the garnishee to a judgment for nonexempt wages and other amounts allowed by law.

Employers should therefore:

• Review the writ of garnishment and all accompanying documents immediately upon receipt.
• Verify whether the named judgment debtor is an employee and whether the employer owes or expects to owe the employee wages or other compensation.
• Determine the employee's applicable net or disposable earnings.
• Identify the type of garnishment and apply the appropriate Arkansas and federal exemptions and withholding limits.
• Begin withholding nonexempt wages as required by the writ.
• Complete and file the required garnishee answer and interrogatories within the applicable deadline.
• Provide any required notices or copies of documents to the employee and other parties.
• Hold and remit garnished wages according to the court's instructions.
• Continue withholding from subsequent earnings while the continuing lien remains in effect.
• Maintain records of the garnishment, calculations, withholding, payments, and related correspondence.

Continuing Wage Garnishment

Arkansas law provides for continuing wage garnishments. Under Arkansas Code § 16-110-415, the judgment or balance due is a lien on salaries, wages, or other compensation due at the time of service of the execution.

The lien continues to apply to subsequent earnings until the total amount due under the judgment and costs has been paid or satisfied. The lien terminates sooner if the employment relationship ends or if the underlying judgment is vacated or modified.

Employers should therefore continue processing the garnishment on subsequent paychecks unless the court or applicable authority provides instructions to stop, or the judgment is otherwise satisfied or terminated.

Remitting Garnished Wages

Employers should follow the payment and remittance instructions contained in the writ, judgment, or other applicable court documents. Arkansas law permits the court to direct the dates and manner in which garnished wages are remitted to the judgment creditor or the creditor's attorney.

Employers should not assume that withheld wages can be paid directly to a creditor without following the procedure specified by the court. The applicable order should control the timing, recipient, and method of payment.

Administrative Withholding Costs

Arkansas Code § 16-110-417 permits a payor to withhold up to $2.50 per pay period in addition to the court-ordered income withholding amount to cover the administrative cost of each withholding.

This administrative fee is separate from the amount withheld for the judgment and should be accounted for separately in payroll records.

Child Support Garnishments

Child support and other support obligations are subject to special priority and withholding rules. Arkansas law specifically provides that income withholding for child support has priority over other legal processes.

Federal law also establishes special limits for child support withholding. Depending on the employee's circumstances, federal law generally permits withholding of up to 50% or 60% of disposable earnings, with an additional 5 percentage points potentially available when the support obligation is more than 12 weeks in arrears.

Employers processing child support income withholding orders should follow the specific order and apply all applicable Arkansas and federal requirements.

Tax and Bankruptcy Garnishments

Federal tax levies, state tax collection proceedings, bankruptcy orders, and other specialized collection actions may be subject to rules that differ from ordinary judgment-creditor garnishments.

Employers should carefully review the issuing agency's or court's instructions before applying the standard Arkansas wage-garnishment procedures to a tax levy, bankruptcy order, or other specialized withholding order.

Federal Garnishment Limits Still Apply

Arkansas employers must comply with applicable federal garnishment restrictions in addition to Arkansas wage exemptions. For ordinary consumer debts, the federal Consumer Credit Protection Act generally limits garnishment to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum hourly wage.

Federal law establishes different limits for child support, certain tax obligations, bankruptcy-related obligations, and other specified debts. When processing a garnishment, payroll should identify the type of obligation before determining the maximum amount that may be withheld.

Priority of Child Support

Arkansas law specifically recognizes the priority of child support income withholding over other legal processes. An employer that receives multiple withholding orders must therefore consider the priority rules applicable to existing child support obligations before withholding wages for another judgment creditor.

The garnishment notice required under Arkansas Code § 16-110-416 also advises employer garnishees that the amount available for withholding may be subject to prior claims and that federal law limits the total amount that may be withheld.

Employee Objections and Exemption Claims

An employee may have the right to claim an exemption or challenge a garnishment. Arkansas Code § 16-66-208 establishes procedures for asserting the statutory wage exemption, including the broader 60-day wage exemption available when the statutory requirements are met.

If a creditor contests an exemption claim, the matter may be presented to the court for determination. Employers should not independently decide whether an employee's exemption claim is legally valid.

Payroll should continue following the garnishment order unless and until the court provides different instructions or enters an order affecting the employer's withholding obligations.

Failure to Answer a Garnishment

An employer that fails or refuses to answer a garnishment can face significant consequences. Under Arkansas Code § 16-110-407, if a garnishee does not answer the writ and interrogatories within 30 days after service, the court may require the garnishee to appear at a hearing and may ultimately enter judgment against the garnishee for nonexempt wages or other property held for the judgment debtor.

Employers should treat garnishment notices as time-sensitive legal documents and promptly route them to the payroll, human resources, legal, or garnishment-processing department responsible for responding to legal orders.

Important Employer Compliance Point

An Arkansas wage garnishment should not be treated as a simple instruction to withhold a fixed percentage of an employee's paycheck. Payroll must identify the type of debt, determine the employee's applicable net or disposable earnings, apply Arkansas exemptions and federal withholding limits, respond to the garnishment within the required time, and remit funds according to the court's instructions.

Employers should pay particular attention to Arkansas's $25-per-week automatic exemption for qualifying laborers and mechanics, the potential 60-day wage exemption, the continuing nature of wage garnishment liens, and the priority of child support income withholding.

Arkansas Garnishment Costs

Arkansas law permits a payor to withhold up to $2.50 per pay period as an administrative cost for each income withholding. Employers should ensure that any administrative fee is handled separately from the court-ordered withholding and does not cause the total deduction to exceed applicable legal limits.

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