Wage Garnishments, Levies, And Child Support Withholding

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1 Page 1 Wage Garnishments, Levies, And Child Support Withholding All Wage Garnishments, Levies, and Child Support Withholding Orders are processed by University Payroll Services. Do not accept any Withholding Orders in your office, and DO NOT attempt to interpret Wage Withholding orders for employees or supervisors. This information is being supplied to you for general payroll information purposes only. Please forward all questions to: University Payroll Services University Park Campus Stonier Hall Room 100 MC 1140 Phone: (213) Fax: (213) Garnishment means any legal or equitable procedure through which an employee s earnings are required to be withheld to pay off a debt incurred by the employee. The term refers to the court proceeding through which a creditor or the government seeks to reach an employee s earnings before they are paid, so that the earnings can be applied to satisfy a claim against the employee. Employee wages can be garnished or attached because of debts to creditors, federal and state tax levies or unpaid alimony and child support payments. Wage attachment and Wage Assignment are other terms for garnishment. Federal wage garnishment law (Title III of the Consumer Credit Protection Act, 15 USC Section 1671) limits the amount of an employee s earnings that may be garnished in any pay period and protects employees from discharge because of any one indebtedness. Under federal law, garnishment amounts must be based on an employee s Disposable earnings. Earnings means compensation paid or payable for personal services, whether called wages, salary, commission, bonus, or otherwise. An employee s disposable earnings means that part of earnings remaining after deduction of any amount required by law to be withheld (such as FICA tax deductions, and federal and state income tax withholding deductions).

2 Page 2 If more than one Earnings Withholding Order is received for an employee, the following priority must be followed: 1) Child Support 2) Spousal Support 3) Federal Tax Levy 4) State Tax Levy 5) Creditor Garnishment or Chapter Thirteen Bankruptcy. CHILD SUPPORT There are three different types of CHILD SUPPORT orders: 1) State Of California Child Support Collection Program of 50% OF TOTAL NET DISPOSABLE EARNINGS until the total amount due listed on the Order is withheld or a written Release to Vacate is received. 2) Marshall Of Municipal Courts Order For Support of 25% OF TOTAL NET DISPOSABLE EARNINGS until the total amount due listed on the Order is withheld or a written Release to Vacate is received. 3) District Attorney Wage And Earning Assignment Order indicated on the Court Order, not to exceed 50% OF TOTAL NET DISPOSABLE EARNINGS until the total amount due listed on the Order is withheld or a written Release to Vacate is received.

3 Page 3 SPOUSAL SUPPORT indicated on the Court Order, not to exceed 50% OF TOTAL NET DISPOSABLE EARNINGS until the total amount due listed on the Order is withheld or a written Release to Vacate is received. INTERNAL REVENUE SERVICE - FEDERAL TAX LEVY When received in Payroll Services, a copy of the levy along with FORM 688- W will be forwarded to the employee via their home address immediately. We must begin withholding from the employee s earnings for the first pay period that ends ten or more days after receipt of the order. Using statutory tables, the IRS determines how much of the employee s net disposable earnings are EXEMPT from the levy (how much money the employee may take home) versus how much must be forwarded to the Internal Revenue Service. Generally speaking, the amount withheld from an employee s paycheck due to a Federal Tax Levy is much higher than any other Wage Withholding Order and the amount is not subject to negotiation. Please note that employees from whom Levy Orders have been received are encouraged by the IRS to contact the IRS to make alternative arrangements directly with the IRS which will then be communicated to University Payroll Services. Payroll Services will continue withholding at the rate indicated on the Levy until the total amount due listed on the Levy is withheld or a written Release to Vacate is received.

4 Page 4 STATE OF CALIFORNIA - FRANCHISE TAX BOARD - EARNINGS WITHHOLDING ORDER FOR TAXES of 25% OF TOTAL NET DISPOSABLE EARNINGS until the total amount due listed on the Order is withheld or a written Release is received. Please note that employees from whom Earnings Withholding Orders have been received are encouraged by the State of California Franchise Tax Board to contact them directly to make alternative arrangements which will then be communicated to University Payroll Services STATE OF CALIFORNIA - FRANCHISE TAX BOARD - REGISTRATION COLLECTION UNIT of 25% OF TOTAL NET DISPOSABLE EARNINGS until the total amount due listed on the Order is withheld or a written Release is received. Please note that employees from whom Earnings Withholding Orders have been received are encouraged by the State of California Franchise Tax Board to contact them directly to make alternative arrangements which will then be communicated to University Payroll Services

5 Page 5 CREDITOR GARNISHMENT: Federal law restricts the amount of an employee's disposable earnings that can be garnished in any pay period. PAY PERIOD BIWEEKLY MONTHLY Disposable Earnings $0.00-$ $ Garnishment NONE NONE Withholding Amount Disposable Earnings $ $ $ $ Garnishment Amount above $ Amount above $ Withholding Amount Disposable Earnings $ or more $ or more Garnishment Withholding Amount Maximum of 25% of total Net Disposable Earnings Maximum of 25% of total Net Disposable Earnings The withholding period is the period covered by the Earnings Withholding Order. The withholding period begins ten calendar days after the order is received and continues until the total amount due, plus additional amounts for costs and interest is withheld. It may end sooner if written notice signed by the levying officer specifying an earlier termination date or an order of higher priority is received. IMPORTANT WARNINGS: 1) IT IS AGAINST THE LAW TO FIRE THE EMPLOYEE BECAUSE OF EARNINGS WITHHOLDING ORDERS FOR THE PAYMENT OF ONLY ONE INDEBTEDNESS. No matter how many orders you receive, so long as they all relate to a single indebtedness (no matter how many debts are represented in that judgment) the employee may not be fired. 2) IT IS ILLEGAL TO AVOID AN EARNINGS WITHHOLDING ORDER BY POSTPONING OR ADVANCING THE PAYMENT OF EARNINGS. The employee s pay period must not be changed to prevent the order from taking effect.

6 Page 6 CHAPTER 13 - U.S. BANKRUPTCY COURT ORDER of indicated on the Court Order, until the total amount due listed on the Order is withheld or a written Release is received.