Attachment of earnings and court orders in the United States
Reviewed by Mellow Editorial Team, HR & payroll content team
Wage garnishment in the United States is a legal process that requires an employer to withhold a portion of an employee's earnings and send those funds directly to a creditor or government agency. Once you receive a valid garnishment order, compliance is mandatory — ignoring it can expose your business to liability.
What wage garnishment actually is
A garnishment order (sometimes called an attachment of earnings) is a court or administrative directive instructing you, as the employer, to intercept part of an employee's paycheck before it reaches them. Orders come from several sources:
- Federal or state courts for consumer debts, medical bills, or civil judgments
- The IRS or state tax agencies for unpaid taxes
- Child support enforcement agencies for child or spousal support
- The Department of Education or guaranty agencies for defaulted student loans
Each type has its own calculation rules and priority rules. Child support and tax levies, for example, take priority over most other orders.
The federal framework: Title III of the Consumer Credit Protection Act
Federal law sets a floor on how much can be withheld. Under Title III of the Consumer Credit Protection Act (CCPA), the maximum that can be garnished for ordinary consumer debts is the lesser of:
- 25% of the employee's disposable earnings for that pay period, or
- The amount by which disposable earnings exceed 30 times the federal minimum wage
Disposable earnings are what remains after legally required deductions — federal, state, and local taxes, Social Security, Medicare, and state unemployment insurance. Voluntary deductions like 401(k) contributions or health insurance premiums do not reduce disposable earnings for this calculation.
Child support and alimony have higher limits: up to 50% of disposable earnings if the employee supports another family, or up to 60% if they do not, with an additional 5% allowed if payments are more than 12 weeks in arrears.
Tax levies follow IRS Publication 1494, which uses a separate table based on the employee's filing status and number of claimed exemptions to determine the exempt amount — whatever remains after the exempt amount is subject to levy.
Many states impose stricter limits than the federal rules. Wherever state law is more protective of the employee, the state limit applies.
Your step-by-step obligations as an employer
1. Review the order carefully. Confirm it is properly served, names your employee, and comes from a court or agency with jurisdiction. Note the type of debt, the withholding amount or formula, a remittance address, and any stated priority.
2. Notify the employee. You are generally required to inform the employee promptly. You cannot use the garnishment as a reason to discipline or terminate them — federal law prohibits discharging an employee because of a single garnishment order, and some states extend that protection further.
3. Calculate the withholding. Apply the CCPA cap (or the applicable state cap, whichever is lower) each pay period. For child support, follow the income withholding order (IWO) exactly — a standardized federal form governs most of these.
4. Remit on time. Send the withheld funds to the designated agency or creditor within the deadline stated on the order. For child support, most states require remittance within a few business days of the pay date. For IRS levies, follow the schedule specified in the levy notice.
5. Handle multiple orders correctly. If you receive more than one garnishment, apply them in priority order: child support first, then tax levies, then other debts. You cannot withhold more than the CCPA cap in aggregate for lower-priority orders.
6. Continue until released. Keep withholding until you receive an official release or the debt is satisfied. Do not stop because the employee tells you the debt is paid — you need written confirmation from the issuing authority.
7. Keep records. Document every deduction, remittance, and communication. Retain these records in case of audit or dispute.
Payroll reporting and bookkeeping implications
Garnishments are post-tax deductions for most debt types, meaning you withhold and remit FICA and federal income tax on the employee's full gross wages before reducing for the garnishment. The withheld garnishment amount does not appear on the employee's Form W-2 as a separate line — only their regular wages and taxes are reported. Your payroll ledger should reflect a liability account for amounts withheld but not yet remitted. If you use payroll software or a third-party provider, confirm it supports multiple simultaneous garnishment orders and generates the remittance records you need.
Penalties for non-compliance
Failing to withhold and remit can result in your business being held liable for the full amount that should have been withheld. Courts can enter judgment against you directly. For child support non-compliance, contempt proceedings are possible. IRS levy violations can result in penalty assessments. Given these consequences, treating a garnishment order as routine payroll processing — rather than an optional request — is the only sensible approach.
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