Wage garnishment requires that an employer withhold money from an employee’s pay to satisfy a debt.

In most cases, a court order would be necessary for a creditor to garnish your wages. However, there are certain circumstances in which wage garnishment is allowed in Georgia without a court judgment.

What Exactly Is Wage Garnishment?

Wage garnishment is a legal procedure that allows a portion of a person’s earnings to be redirected to a creditor to pay a debt. Tax levies and administrative garnishments for non-tax debts (such as student loans) owed to the federal government are examples of legal garnishment procedures that don’t require a court order.

Wage garnishment is different from voluntary wage assignments. Voluntary wage assignments mean the employee agrees for their employer to redirect a specified amount of their earnings to pay a creditor. An example would be if your car payment comes from your check and goes into the company-held credit union before you receive your paycheck.

Wages That Can Be Garnished Without Judgment in Georgia

Wages can be garnished if a person defaults on a federal student loan. Up to 15% of disposable income, but not more than thirty times the minimum wage, can be taken by the loan holder. Your income tax return may also be seized. Proper notice must be sent to the debtor before any action is taken. Wage garnishment cannot occur for private student loans unless the lender sues.

If you owe unpaid federal income taxes, the federal government can garnish wages without a court order. The state can also garnish wages to satisfy delinquent state taxes. In addition, money can be seized from your bank accounts by bank levy. A collection notice or FiFa Lien would be recorded first.

Efforts to collect unpaid child support are aggressive in most states. In Georgia, all court ordered child support includes an automatic income withholding order. A much higher percentage of a person’s disposable income can be garnished if they are in arrears on child support payments. Up to 60% can be taken, and an additional 5% may be added when payments are more than twelve weeks late. Property liens may be filed and tax refunds can be seized to satisfy back child support.

Are There Limitations on Wage Garnishments?

Title III of the Consumer Credit Protection Act (CCPA) limits how much of a person’s earnings can be garnished. Title III also prevents an employer from firing an employee for garnishment for one debt. Title III protects everyone who receives earnings. The US Department of Labor’s Wage and Hour Division oversees the administration of CCPA’s Title III.

Questions regarding the amount of garnishment or termination should be directed to the Wage and Hour Division. Any other questions about a garnishment are under the court’s jurisdiction or the agency that initiated the garnishment. State and federal laws (other than the CCPA) control the priority of garnishments, but the CCPA determines the percentages that can be garnished from disposable earnings.

How Are Earnings Defined?

According to the CCPA, earnings are compensation that is due or received for personal services. This compensation includes wages, salaries, commissions, bonuses, and payments from retirement or pensions. If you receive payment from an employment-based disability plan, those count as earnings, too.

Sometimes earnings are also lump sums. Those kinds of earnings include:

• Commissions
• Bonuses, both discretionary and non-discretionary
• Bonuses for productivity or performance
• Profit sharing
• Bonuses for referrals or signing-on
• Incentives for relocation
• Service awards
• Meritorious pay increases
• Holiday pay
• Wage replacement workers’ compensation payments
• Termination pay
• Severance pay
• Insurance settlements

The question used to determine whether the lump sum payment qualifies as earnings is whether the employer paid the sum to the employee for services rendered. If the payment were for services rendered, it would be subject to garnishment limits. If the payment is not deemed earnings under the services rendered test, they won’t be considered earnings.

If someone works for tips, the wages the employer pays them directly and the tip credit the employer claims under state or federal statute are considered earnings for wage garnishment. Tips above the tip credit amount or above the wages the employer pays the employee directly are not considered earnings for wage garnishment.

General Limitations on Earnings That Can Be Garnished

The earnings that can be garnished depend on the employee’s disposable wages. Disposable incomes are what is left after required deductions are made. Deductions required by law include taxes, Social Security, Medicare, and state unemployment insurance. Those also include withholdings for retirement systems.

Deductions that aren’t required by law are typically not included in the computation for disposable earnings. These deductions include union dues, health insurance, certain retirement plan contributions, and payments to employers for things like payroll advances or merchandise purchases.

Title III sets the maximum amount that is garnished in any one pay period. No matter how many garnishment orders the employer receives, they are bound by the Title III maximum limits. Ordinary garnishments by creditors can’t exceed whichever is less: 25% of the disposable earnings or how much the earnings exceed 30 times the federal minimum wage, which is currently $7.25 an hour. An ordinary garnishment isn’t for support, bankruptcy, or state or federal taxes.

So, if someone is paid weekly and has $217.50 or less in disposable earnings, garnishment can’t happen. If disposable earnings are between $217.50 and $290, the amount above $217.50 can be garnished. Disposable wages above $290 can be garnished at a maximum of 25%. If the pay period covers more than one week at a time, then the calculations should include multiples of the weekly numbers to determine how much can be garnished each pay period.

What About Support Garnishment Limitations?

Limits exist for how much can be garnished for court-ordered child support or alimony. Up to 50% of workers’ disposable earnings can be garnished for support if that individual has another spouse or child they are supporting. If they only support the spouse or child named in the court order, up to 60% of their earnings can be garnished. People over 12 weeks behind on support payments can have an extra 5% garnished for support.

Exceptions to the Wage Garnishment Limitations

Some garnishments are exempt from the limitations. For example, bankruptcy court orders and federal or state tax debts are exempt from limits. When state wage garnishment laws differ from Title III rules, the one that garnishes the lower amount must be used.

Whom to Call When You Face Wage Garnishment

If your wages are being garnished, you may be able to obtain relief by filing for bankruptcy. A Chapter 13 bankruptcy will allow the debt to be reorganized and repaid over a 3-5 year period. Contact Morgan & Morgan Attorneys at Law if you have questions about wage garnishment or debt relief.

Related Content: What Can I Do About Wage Garnishment

Original article revised on Jan 13, 2023