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Training For North Dakota 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.

North Dakota Garnishment Law Requirements

North Dakota employers that receive a wage garnishment must comply with North Dakota garnishment laws as well as applicable federal requirements. North Dakota's garnishment rules establish specific limits on the amount of an employee's disposable earnings that may be withheld and provide exemptions for certain earnings and dependents.

North Dakota Wage Garnishment Overview

A North Dakota wage garnishment is a legal process through which a creditor may require an employer to withhold part of an employee's earnings to satisfy a debt. North Dakota garnishment procedures are primarily governed by Chapter 32-09.1 of the North Dakota Century Code.

A creditor generally must obtain a judgment before proceeding with a garnishment against an employee's earnings. North Dakota law provides a specific garnishment procedure for earnings held by a third-party employer.

How Much Can Be Garnished in North Dakota?

For most ordinary creditor garnishments, North Dakota law generally limits the amount of an employee's aggregate disposable earnings for any workweek to the lesser of:

• 25% of the employee's disposable earnings for that week
• The amount by which disposable earnings exceed 40 times the federal minimum hourly wage

North Dakota provides an additional reduction in the maximum amount subject to garnishment of $20 for each dependent family member residing with the employee, provided the employee properly claims the dependents.

Within 10 days after receiving the garnishment summons, the employee may provide the employer with a signed list of qualifying dependents. If the employee does not provide the list within that period, the employee is presumed to claim no dependents until a list is provided.

North Dakota Disposable Earnings

North Dakota defines disposable earnings as the portion of an individual's earnings remaining after deductions required by other law have been withheld.

For purposes of the garnishment calculation, employers should determine the employee's disposable earnings before applying the applicable statutory limit. A garnishment should not simply be calculated as a percentage of gross wages.

North Dakota Wage Garnishment Process

A North Dakota wage garnishment generally begins after a creditor obtains a judgment and serves the appropriate garnishment documents on the employer.

When an employer receives a North Dakota wage garnishment, payroll should:

• Record the date the garnishment summons is received
• Review the garnishment summons, judgment, notice, and instructions
• Verify the employee's identity and employment status
• Determine the employee's gross earnings and disposable earnings
• Calculate the applicable garnishment limitation
• Review whether the employee has properly claimed dependent exemptions
• Review existing garnishments and support withholding orders
• Determine whether a special exemption or exception applies
• Complete and return any required garnishee disclosure
• Withhold wages according to the applicable legal process
• Remit withheld amounts according to the applicable instructions
• Continue withholding while the garnishment remains effective
• Maintain records of calculations, withholding, and payments

North Dakota Garnishment Orders

A North Dakota employer that receives a valid garnishment becomes a garnishee and may be required to retain nonexempt earnings or other property belonging to the judgment debtor.

North Dakota law requires a garnishee to provide a written disclosure concerning indebtedness to the judgment debtor and to answer applicable written interrogatories. The garnishee disclosure generally must be served within 20 days after valid service of the garnishee summons.

Employers should respond accurately and within the applicable deadline. Failure to provide the required disclosure can expose the employer to additional liability.

North Dakota Garnishment Exemptions

North Dakota law provides exemptions that may protect certain property and income from garnishment. Chapter 32-09.1 includes specific protections relating to earnings and dependent family members.

North Dakota's garnishment restrictions do not apply to certain categories of obligations, including court orders for support, bankruptcy orders under Chapter XIII of the Bankruptcy Act, and debts for state or federal taxes.

Employees may also have additional protections under federal law depending on the type of debt and source of the funds.

Employers should not independently determine whether an employee's wages or other property are exempt unless the applicable legal process requires the employer to make that determination. Payroll should follow the garnishment documents and any subsequent court instructions.

North Dakota Child Support Garnishment

Child support and other family-support obligations are subject to special North Dakota and federal requirements and generally receive priority over ordinary creditor garnishments.

North Dakota law specifically excludes court orders for the support of a person from the ordinary earnings restrictions contained in the state's general garnishment statute. Federal law also establishes separate limits for child support withholding.

Federal law generally permits withholding up to 50% of disposable earnings when the employee is supporting a spouse or dependent child other than the person receiving support, or up to 60% when the employee is not supporting another spouse or dependent child. An additional 5% may generally be withheld when the support obligation is more than 12 weeks in arrears.

North Dakota employers processing an income withholding order for child support should follow the specific order and applicable North Dakota and federal requirements rather than applying the ordinary creditor-garnishment calculation.

North Dakota Tax Garnishments

Federal and North Dakota tax collection actions may be subject to specialized levy procedures that differ from an ordinary creditor garnishment.

North Dakota law specifically excludes debts due for state or federal taxes from the ordinary earnings restrictions in North Dakota's general garnishment statute.

Employers receiving a federal or North Dakota tax levy should follow the instructions provided by the applicable taxing authority rather than automatically applying the ordinary North Dakota wage-garnishment calculation.

North Dakota Student Loan Garnishment

Defaulted federal student loans may be subject to administrative wage garnishment under federal law. Federal administrative wage garnishment can generally require withholding of up to 15% of disposable pay for qualifying defaulted federal student loans.

Employers receiving a federal student loan administrative wage garnishment should follow the instructions from the issuing federal agency or guaranty agency.

North Dakota Bankruptcy Garnishment

Bankruptcy-related wage withholding can be subject to federal bankruptcy law and may operate differently from an ordinary North Dakota judgment garnishment.

North Dakota's general earnings restrictions specifically exclude certain bankruptcy orders. Employers receiving a bankruptcy-related wage order should review the order carefully and follow the applicable federal and North Dakota requirements.

Multiple Garnishments in North Dakota

North Dakota employers may receive multiple garnishment and income withholding orders affecting the same employee. Payroll should review each order to determine its type, priority, effective date, and applicable withholding limitation.

Child support and other legally prioritized withholding orders may be subject to different rules than ordinary creditor garnishments. Employers should maintain a complete record of all garnishments affecting an employee and should not assume that multiple orders permit withholding beyond the applicable legal maximum.

Federal Garnishment Limits

North Dakota employers must comply with the federal Consumer Credit Protection Act in addition to North Dakota garnishment law. For ordinary consumer debts, federal law 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.

North Dakota's ordinary creditor-garnishment statute uses a 40-times federal minimum wage threshold and also provides a $20 reduction in the maximum garnishment amount for each dependent family member residing with the employee when properly claimed.

Different federal limits apply to child support, tax debts, federal student loans, bankruptcy, and certain other obligations. Payroll should identify the type of debt before calculating the withholding.

Protection From Discharge

North Dakota law prohibits an employer from discharging an employee because the employee's earnings have been subjected to garnishment or execution. North Dakota's garnishment statute specifically addresses protection from discharge related to garnishment.

Employers should therefore avoid adverse employment action based solely on an employee's garnishment status.

When to Stop a North Dakota Wage Garnishment

Employers should continue withholding while the garnishment remains legally effective and wages remain subject to the order.

North Dakota law provides a procedure for termination of a garnishment. Withholding should stop when the garnishment has been legally terminated, released, satisfied, or otherwise modified by the appropriate authority.

Payroll should not stop a garnishment solely because an employee states that the debt has been paid. Appropriate documentation should be obtained before terminating or changing the withholding.

North Dakota Garnishment Recordkeeping

Employers should maintain records of:

• Garnishment summonses and orders
• Dates of service
• Court judgments and related documents
• Garnishee disclosures and responses
• Employee earnings
• Disposable-earnings calculations
• Dependent exemption claims
• Amounts withheld
• Amounts remitted
• Support withholding orders
• Correspondence concerning the garnishment
• Documentation terminating or modifying the garnishment

Accurate records are especially important because North Dakota's garnishment calculation can be affected by dependent family members, pay periods, the type of debt, and the date the garnishment was served.

Important North Dakota Garnishment Compliance Points

North Dakota wage garnishment compliance requires more than applying a fixed percentage to an employee's paycheck. Payroll must identify the type of obligation, calculate disposable earnings, apply the applicable North Dakota garnishment limit, account for qualifying dependent family members, consider exemptions and priority rules, respond to the garnishment, and remit withheld wages according to the applicable instructions.

For most ordinary creditor garnishments, North Dakota generally limits the aggregate amount subject to garnishment for a workweek to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 40 times the federal minimum hourly wage. The maximum is reduced by $20 for each dependent family member residing with the employee when the dependents are properly claimed. Special rules apply to support orders, taxes, bankruptcy, student loans, and other obligations.

North Dakota Garnishment Law Changes

North Dakota garnishment laws and procedures can change through legislation, court decisions, and administrative requirements. Employers should periodically review current North Dakota law and the specific garnishment documents they receive to ensure that payroll calculations and procedures remain compliant.

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