Wage Garnishment Compliance Checklist
Wage Garnishment Laws And Compliance Guide For Employers
Wage garnishments can create significant responsibilities for employers and payroll departments. When an employer receives a valid garnishment order, it generally must calculate the correct withholding, deduct the required amount from the employee's wages, remit the funds to the appropriate recipient, and maintain accurate records.
Garnishment requirements can vary depending on the type of debt, the employee's work location, and the applicable federal, state, and local laws. Employers should understand the requirements that apply before processing a garnishment and should establish consistent procedures for handling orders from courts, government agencies, and other authorized entities.
About Wage Garnishments
What Is a Wage Garnishment?
A wage garnishment is a legal order requiring an employer to withhold a portion of an employee's earnings and remit those funds to a court, government agency, creditor, or other authorized recipient to satisfy a debt or legal obligation.
Once an employer receives a valid garnishment order, payroll generally has an obligation to follow the instructions in the order and comply with applicable withholding limits. The employer is typically acting as the withholding agent and does not determine whether the underlying debt is valid.
Types of Wage Garnishments
Not all garnishments follow the same rules. Payroll should first identify the type of order before determining how much to withhold.
- Ordinary creditor garnishments
- Child support withholding
- Alimony or spousal support
- Federal tax levies
- State tax garnishments
- Federal student loan garnishments
- Bankruptcy orders
- Other government agency garnishments
Special rules can apply to child support, tax debts, student loans, bankruptcy orders, and other government collections. Employers should not automatically apply the same withholding calculation to every garnishment.
Garnishment Court Cases- 2021 - 2026
The following are selected U.S. garnishment cases decided between 2021 and 2026. They cover wage garnishment, bank-account garnishment, exemptions, garnishment procedures, jurisdiction, default judgments, and limits on garnishment, and are provided here as study for common mistakes or issues to avoid. M & I Marshall & Ilsley Bank v. Higdon
Court: Kansas Court of Appeals
Year: 2023
Case No.: 125,672
Issue: Interstate judgment and garnishment exemptions.
The case involved a judgment originally obtained in Missouri and later registered in Kansas. The creditor sought to garnish a bank account in Kansas. The court considered whether another state's law could effectively create an exemption from Kansas garnishment law.
The Kansas Court of Appeals concluded that Kansas law governed the garnishment proceeding. The case is useful when a judgment from one state is being enforced through garnishment in another state.
Sawyer v. Tidelands Health ASC, LLC
Court: United States Court of Appeals for the Fourth Circuit
Year: 2023
Case No.: 21-2161
Issue: Federal wage-garnishment limitations.
The plaintiff argued that deductions from her wages violated the federal Consumer Credit Protection Act, including the federal restrictions on wage garnishment under 15 U.S.C. § 1673.
The Fourth Circuit considered whether the deductions constituted a "garnishment" under federal law. The court concluded that the particular deductions at issue were not garnishments because they were made pursuant to an agreement rather than through a legal or equitable procedure.
This case is useful when determining whether a payroll deduction is actually subject to federal garnishment limitations.
Meneses v. Salander Enterprises
Court: Utah Court of Appeals
Year: 2023
Case No.: 20210720-CA
Issue: Debt collection and wage garnishment.
The case involved debt collection and proceedings concerning the enforcement of debts through wage garnishment.
The decision is relevant to the relationship between debt collection lawsuits, judgments, and subsequent garnishment proceedings.
RBC Global Asset Management (U.S.), Inc. v. Lattimore
Court: Supreme Court of Georgia
Year: 2024
Case No.: S24A0789
Issue: Garnishment summons and personal jurisdiction.
The case involved a judgment exceeding $20 million and garnishment proceedings against financial-services companies.
The Georgia Supreme Court held that the wrong type of garnishment summons had been used against RBC Global Asset Management. As a result, the garnishment was invalid and the court had not properly obtained personal jurisdiction over the garnishee.
This is an important recent case concerning the creditor's obligation to use the correct garnishment procedure.
Yantos v. Berardo
Court: Ohio Court of Appeals
Year: 2024
Issue: Wage garnishment and personal earnings.
The case involved enforcement of a judgment through garnishment and the distinction between wages or personal earnings and other property or funds.
The decision is relevant when determining whether money received by a judgment debtor qualifies as earnings protected by a state's wage-garnishment limitations.
Otu v. Whyte-Otu
Court: Georgia Court of Appeals
Year: 2025
Case No.: A25A1013
Issue: Subject-matter jurisdiction over a garnishment.
The creditor attempted to enforce a $50,000 judgment through a magistrate-court garnishment.
The Georgia Court of Appeals held that the magistrate court lacked subject-matter jurisdiction because the amount involved exceeded the court's jurisdictional limit.
The case demonstrates that jurisdictional requirements can affect the validity of a garnishment.
Singh v. Singh
Court: Mississippi Court of Appeals
Year: 2025
Case No.: 2024-CA-00646-COA
Issue: Garnishment of a jointly held bank account.
A judgment creditor sought to garnish a bank account held jointly by the judgment debtor and other individuals.
The debtor argued that the money belonged to the other account holders and therefore should not be garnished.
The court considered the evidence concerning ownership of the funds and upheld the garnishment-related judgment.
This case is useful for disputes involving joint bank accounts.
Professional Financial Services of Georgia, LLC v. Washington
Court: Ohio Court of Appeals
Year: 2025
Case No.: 24AP-387
Issue: Wage garnishment.
The case involved a debtor challenging the garnishment of her wages.
The court considered Ohio's garnishment procedures and the enforcement of the creditor's judgment against the debtor's earnings.
SMS Financial Recovery Services, LLC v. Silverstone
Court: Georgia Court of Appeals
Year: 2026
Case No.: A26A0482
Issue: Third-party claims to garnished bank funds and attorney fees.
The case involved a garnishment against a bank account where a third party claimed an interest in the money.
The court addressed the third-party claim and whether attorney fees could be awarded in connection with the garnishment proceeding.
The decision is relevant when someone other than the judgment debtor claims that garnished funds belong to them.
Moore v. Capesius
Court: Supreme Court of Alabama
Year: 2026
Case No.: SC-2026-0037
Issue: Continuing wage garnishment and change of employment.
The case involved a continuing wage garnishment that had been in place for several years.
The employer's circumstances subsequently changed, including a change in the debtor's employment. The Alabama Supreme Court considered the effect of those changes on the employer's continuing garnishment obligations.
Federal Wage Garnishment Rules
The federal Consumer Credit Protection Act establishes limitations on many ordinary creditor garnishments. For covered garnishments, federal law generally limits withholding to the lesser of 25% of an employee's disposable earnings or the amount by which disposable earnings exceed 30 times the applicable federal minimum wage.
Federal law also establishes different rules for certain types of obligations. Child support and alimony withholding can generally reach higher percentages of disposable earnings depending on the employee's circumstances. Federal tax levies, student loan garnishments, and bankruptcy orders may also be subject to different requirements.
Because federal limits do not apply identically to every type of garnishment, employers should identify the order before calculating the withholding.
State Wage Garnishment Laws
States may establish additional protections for employees beyond the federal requirements. State laws can affect the maximum percentage that may be withheld, protected earnings thresholds, exemptions, priority among competing garnishments, and employer procedures.
Some states provide greater protection against ordinary creditor garnishments, while others generally follow the federal framework with state-specific procedures and exemptions.
Employers with employees working in multiple states should determine which state's requirements apply before calculating a garnishment. Payroll should not assume that the same withholding calculation applies to employees in every location.
Garnishment Payroll Checklist
Garnishments and Payroll Compliance
Garnishments require coordination between payroll, HR, legal, and, in some cases, outside agencies or service providers. A consistent process can help employers reduce calculation errors, missed deadlines, incorrect remittances, and other compliance problems.
Employers should also recognize that garnishment requirements can change. State minimum wages, protected earnings thresholds, withholding limits, agency procedures, and other requirements may be updated over time. Below are suggestions for a self-checklist.
- Verify the employee named in the garnishment order
- Identify the type of garnishment
- Review the issuing court, agency, or authorized entity
- Confirm the order is valid and properly served
- Record the date the garnishment was received
- Confirm the effective date of withholding
- Review the withholding instructions
- Determine which federal and state laws apply
- Calculate the employee's disposable earnings
- Determine the applicable federal withholding limit
- Determine whether state law provides greater employee protection
- Check for exemptions and protected earnings provisions
- Review priority rules when multiple garnishments exist
- Set up the garnishment correctly in the payroll system
- Verify the withholding amount before payroll is processed
- Remit withheld funds by the required deadline
- Maintain documentation of payments and remittances
- Monitor active garnishments for amended or replacement orders
- Continue withholding until the order is properly released or terminated
- Follow required procedures when an employee leaves the company
- Review garnishment requirements when an employee changes work location
- Periodically audit garnishment calculations and remittances
- Monitor changes to applicable federal and state requirements
Above all, make sure that you verify your
state's garnishment rules!
Frequently Asked Questions About Wage Garnishments
What Is a Wage Garnishment?
A wage garnishment is a legal process requiring an employer to withhold part of an employee's wages and send the withheld amount to an authorized recipient to satisfy a debt or legal obligation.
How Much Can an Employer Garnish From an Employee's Pay?
The amount depends on the type of garnishment, applicable federal requirements, and state law. For many ordinary creditor garnishments, federal law generally limits withholding to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the applicable federal minimum wage.
What Is the Difference Between a Garnishment and a Levy?
A garnishment generally involves withholding money from an employee's wages or other income, while a levy is a legal process used by a government authority to collect a debt from property or funds. Tax levies are subject to specialized federal or state requirements.
Does Every Garnishment Have the Same Rules?
No. Ordinary creditor garnishments, child support, alimony, tax levies, student loan garnishments, bankruptcy orders, and other government collections can be subject to different rules and withholding limits.
What Should an Employer Do When It Receives a Garnishment?
When a garnishment order arrives, payroll should review the document carefully before making any deduction. The employer should verify the employee, identify the type of garnishment, confirm the effective date, review the withholding instructions, and determine which federal and state requirements apply.
The employer should then calculate the employee's disposable earnings and determine the maximum amount that can legally be withheld. The withholding should be entered into the payroll system and remitted to the appropriate recipient according to the order's instructions and deadlines.
Can an Employer Ignore a Wage Garnishment?
Generally, no. Once an employer receives a valid garnishment or income withholding order, the employer generally must comply with the applicable withholding and remittance requirements.
Failing to properly process a garnishment can expose an employer to liability, penalties, or other consequences under applicable federal or state law. Employers should establish procedures that ensure garnishment orders are promptly routed to the appropriate payroll or HR personnel.
Can an Employer Fire an Employee Because of a Wage Garnishment?
Federal law generally prohibits an employer from discharging an employee because the employee's earnings have been garnished for any one debt. Some states may provide broader protections, including protections involving multiple garnishments.
Employers should review applicable federal and state employment protections before taking action involving an employee who has a garnishment.
What Happens When an Employee Leaves the Company?
Payroll should review active garnishments when an employee resigns, is terminated, is laid off, or otherwise stops receiving wages.
Depending on the type of garnishment, the employer may have additional reporting or final-answer requirements. Child support withholding orders, in particular, can impose specific obligations when employment ends.
Employers should follow the instructions in the applicable order and complete any required reporting to the appropriate agency or recipient.
What Happens If an Employee Has Multiple Garnishments?
An employee may have more than one garnishment at the same time. When this occurs, payroll may need to determine which order has priority and how the applicable withholding limits interact.
Priority can depend on the type of debt and the applicable federal or state law. Child support, tax obligations, bankruptcy orders, and ordinary creditor garnishments may not have the same priority.
Employers should not simply process multiple orders independently without determining whether the combined withholding is permitted.
What Should Payroll Do if a Garnishment Order Appears Incorrect?
Payroll should not simply disregard the order. The employer should follow the instructions provided in the order and, when appropriate, contact the issuing court, agency, or authorized entity for clarification. Employers may also wish to consult qualified legal counsel when the requirements are unclear.
Wage Garnishment Compliance Resources
Employers should use a combination of federal requirements, applicable state laws, garnishment orders, agency instructions, and internal payroll procedures when processing wage garnishments. Because garnishment requirements can vary significantly, employers should verify current requirements before making deductions.
