Los Angeles Employment Attorney

Wage Garnishment and the Consumer Credit Protection Act

Wage garnishment is a debt collection procedure used by courts to force payment of an overdue debt, unpaid alimony/child support, or monetary judgment against a defendant. The court’s wage garnishment order would be given to a third party (such as the defendant’s employer), instructing him or her to pay a portion of the defendant’s salary (or other money the defendant would be entitled to) directly to the plaintiff or creditor.

For example, if Mr. Smith loses a lawsuit but refuses to pay a $5,000 monetary judgment, the court may issue a wage garnishment order to Mr. Smith’s employer. As a result, instead of paying Mr. Smith the full amount of his $1,000 salary, the employer might be instructed to pay Mr. Smith only $600, and pay the remaining $400 to the plaintiff in the lawsuit instead.

Limits on Wage Garnishment

Under Title III of a federal law known as the Consumer Credit Protection Act (CCPA), employees are granted a measure of protection from wage garnishment. Although the CCPA does not forbid wage garnishment, it does limit the percentage of an employee’s disposable wages in any given work period which are subject to garnishment to 25% of disposable earnings, or the difference between the employee’s salary and 30 times the federal minimum wage, whichever is lesser. For child support or alimony payments, the limit becomes 50% of earnings if the defendant is also supporting a current spouse or child, and 60% if he or she is not.

The CCPA also bars employers from discharging or firing an employee because of any one garnishment on his or her wages. However, it does not enforce any such rule for garnishment for second or subsequent debts.

Los Angeles employment attorney Perry Smith specializes in defending the rights and interests of employees. Call 888-356-2529 to learn more.