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Garnishments Policy

March 09, 2008

The Garnishments policy defines garnishments as a court order to an employer to withhold a sum of money from an employee’s wages or salary. A federal levy, which takes precedence over all other garnishments, can take 100 percent of all money due to an employee as of that date. However, it is common for the employee to be allowed to pay in installments. When the Company receives a garnishment notice from more than one source, the moneys will be paid (to the extent that they are available) to each of the creditors in the order in which notification was received. Child support orders take precedence over garnishments resulting from debts, judgments, or other attachment orders.

Subject: Garnishments

Organization: Anonymous

Example of: Standard Policy

Definitions

A garnishment is a court order to an employer to withhold a sum of money from an employee’s wages or salary. A federal levy, which takes precedence over all other garnishments, can take 100 percent of all money due to an employee as of that date. But it is quite common for the employee to be allowed to work out an arrangement for paying in installments.

Deductions

After federal income taxes, Social Security taxes, state and city tax withholding deductions, and state unemployment insurance taxes have been deducted from an employee’s paycheck, the remaining balance is what is considered “disposable earnings” for the period. From this amount, the company will withhold as follows:

1. On a Federal Tax Levy, the total amount will be withheld.

2. On a child support order by a court, the amount over 50 percent of disposable earnings if an obligated parent has a second family, or 60 percent if there is no second family, will be withheld. These limits are each increased by 5 percent if payments are in arrears for a period equal to 12 weeks or more.

3. On a garnishment, generally the amount subject to garnishment may not exceed the lesser of: (a) 25 percent of disposable earnings for that week; or (b) the amount by which the employee’s disposable earnings exceed 30 times the federal minimum hourly wage. Accordingly, based on the current federal minimum wage of $5.15 per hour, there will be no withholding for a garnishment until the employee’s weekly disposable earnings exceed $154.50.

CAUTION: You are to review the garnishment order carefully in the event that state law provides for some other formula for withholding.

The above limitations apply to the employee’s earnings per week, regardless of the pay cycle.

Conflicts

When the Company receives a garnishment notice from more than one source, the moneys will be paid (to the extent that they are available) to each of the creditors in the order in which notification was received.

Child support orders take precedence over garnishments resulting from debts, judgments, or other attachment orders.


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