Wage Garnishment

//Wage Garnishment

Wage Garnishment

As a California employer, you have a number of obligations with regard to paying your employees, including minimum wage and overtime requirements, wage statements, and payroll taxes.  One additional obligation that you may encounter is a wage garnishment order, or wage assignment order.  A wage garnishment order is an order which requires you to withhold a portion of an employee’s wages and send it directly to the person named in the order. There are many different reasons your employee’s wages may be garnished.  An employee’s wages may be garnished if a creditor has successfully obtained a judgment against the employee in court, and has gotten a court order to garnish the employee’s wages.  For other types of debts, including back taxes, defaulted student loans, and back child support, a wage garnishment order may issue without a court proceeding.

A wage garnishment order or wage assignment order is a legal document with which you are obligated to comply as an employer.  Failure to comply may result in civil penalties or even criminal charges.  You may also face civil penalties or civil or criminal charges if you engage in the following conduct:

  • Terminating or disciplining an employee as a result of receiving withholding orders for the payment of a single judgment; and
  • Postponing or advancing payment or earnings, or otherwise taking measures to avoid complying with a wage garnishment order.

Accordingly, it is important that you take wage garnishment orders seriously, and that you understand your obligations under such orders.

COMPLYING WITH WAGE GARNISHMENT ORDERS FROM CREDITORS

If one of your employees is the subject of a wage garnishment order for a debt other than child support or spousal support, you, as the employer, should receive the following documents from either the sheriff or different levying officer:

  • A copy of the wage garnishment order;
  • Form WG-005, the Employer’s Return;
  • Form WG-003, the Employee’s Instructions;
  • Form WG-006, the Claim of Exemption; and
  • Form WG-007, the Financial Statement.

If you do not receive all five of these documents, you should contact the sheriff or levying officer immediately to get a copy.

  • GIVE NOTICE TO THE EMPLOYEE.

    You should note the date on which you received the order, and note it both on the Form WG-005 and in your own records.  Provide the following to the employee as soon as possible, but no later than 10 days from the date you received the order:

    • A copy of the wage garnishment order;
    • Form WG-003, the Employee’s Instructions;
    • Form WG-006, the Claim of Exemption; and
    • Form WG-007, the Financial Statement.
  • DETERMINE THE WITHHOLDING START DATE.

    Starting from the date you received the wage garnishment order, count 10 calendar days forward.  If your next regular payday lands before the 10th day, do not garnish any wages from that paycheck.  You should begin garnishing the employee’s wages on the following payday.

  • DETERMINE THE AMOUNT TO BE WITHHELD.

    The calculation of how much should be garnished requires a determination of the employee’s disposable earnings, as well as the state or local minimum wage (whichever is greater).  The wage garnishment order will include a detailed explanation of how employers should calculate the amount of wages to be garnished.  You can also visit Wage Garnishment Wage Garnishment at the California Courts for additional guidance on how to calculate the proper amount of wages to be garnished, as well as this article at the California Courts for an Earnings Withholding Calculator.

  • COMPLETE THE EMPLOYER’S RETURN.

    You should complete Form WG-005 in its entirety and return two copies to the sheriff or levying officer within 15 days of receiving the wage garnishment order.

  • PAY THE PROPER AMOUNT TO THE LEVYING OFFICER.

    Once you have taken all the steps above, you will need to begin remitting the garnished wages to the sheriff or the levying officer, unless the wage garnishment order identifies a different payee.  The sheriff or levying officer will advise you of the total amount to be satisfied, including any additional costs and interest.  You will need to continue remitting the withheld wages until one of the following occurs:

    • You receive an order from the court advising you to stop withholding;
    • You receive an order from the levying officer to stop withholding; or
    • The total amount owed, including the costs and interest identified by the sheriff or levying officer, has been satisfied.

If the employee stops working for you, advise the sheriff or levying officer immediately.  If the employee returns before 180 days have passed, the wage garnishment order remains in place.

COMPLYING WITH CHILD/SPOUSAL SUPPORT WAGE ASSIGNMENTS

Wage assignment orders as a result of owed child or spousal support work slightly differently from wage garnishments as a result of creditors.  Generally, the family court will determine the amount of child and/or spousal support owed, along with the amount to be deducted from each paycheck.  Child and spousal support wage assignments take priority over all other withholding orders.

Either the parent/spouse who is owed the support will request a wage assignment order from the court, or the local child support agency (LCSA) will issue the wage assignment directly.  The wage assignment order will be accompanied by Form FL-450, a Request for Regarding Earnings Assignment.  You will need to provide your employee with a copy of Form FL-450 as soon as you receive the paperwork.

Starting from the date you received the wage assignment order, count 10 calendar days forward.  If your next regular payday lands before the 10th day, do not garnish any wages from that paycheck.  You should begin garnishing the employee’s wages on the following payday.

Generally, the wage assignment order will specify to whom the payments should be sent, and depending on the circumstances of the case, this will be either the parent/spouse or the California State Disbursement Unit (SDU).  If you are unsure to whom payments should be sent, you can check with the SDU at www.childsup.ca.gov.

MULTIPLE WITHHOLDING ORDERS

If you receive multiple withholding orders, you must comply with the orders according to the priority of those orders – in other words, the law ranks some types of orders above others, with child support at the top of the list, followed by spousal support and orders based on back taxes.  Contact Hackler Flynn & Associates for assistance if you receive multiple withholding orders for an employee.

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By |2019-05-23T14:59:50-07:00April 22nd, 2019|Employment Law|

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Ms. Flynn believes her attorneys and staff should come from a wide range of legal backgrounds and experience. She provides a workplace that is team-oriented and works together to bring the best results to her clients.