• Wage garnishment occurs via payroll deduction.check in macro image by Alexey Klementiev from Fotolia.com
  
  A wage garnishment is a statutory process that requires the employer to withhold a portion of an employee's paycheck to satisfy a debt that the latter owes. According to the U.S. Department of Labor, wages, commissions, bonuses, salaries and retirement income are subject to wage garnishment.
  
  

Discharge Law

• The Wage and Hour Division of the U.S. Department of Labor's Employment Standards Administration regulates Title III of the Consumer Credit Protection Act (CCPA). Under this Act, the employer cannot terminate an employee because he has received a single wage garnishment. This applies regardless of the number of attempts that have been made to collect this debt. However, if the employer receives two or more wage garnishments for the employee, Title III does not protect the latter from subsequent termination.
  
  

Deduction Limits

• Under Title III, the employer may withhold the smaller of 25 percent of disposable compensation or the amount by which the disposable wages exceed 30 times the federal minimum wage--$7.25/hour as of 2010. Subtract employee deductions (such as taxes and medical benefits) to determine disposable wages. For instance, if the employee's disposable income is $217.50 (30 x $7.25) or less a week, no income can be garnished. If the employee earns more than $217.50 but less than $290 (40 x $7.25), the garnishment would be $72.50 ($290 - $217.50). If the employee earns more than $290, he may be garnished up to 25 percent of his disposable income. Under the Debt Collection Improvement Act of 1996, the employer can garnish up to 15 percent of disposable pay for student loan debts. For child support, the employer may withhold up to 50 percent if the employee is supporting a child or spouse not included in the support order. If not, up to 60 percent can be withheld. Additionally, 5 percent may be withheld for child support arrears. The garnishment paperwork typically advises the employer how to conduct the withholding.
  
  

Priority

• Besides a few exceptions, the employer withholds wage garnishments in the order he receives them. Once the existing order is satisfied, the employer may begin another. But if the amount being currently garnished is below 25 percent, the employer can withhold the garnishments simultaneously. For instance, if the employer withholds the existing garnishment at 15 percent, he can withhold another at no more than 10 percent. If the employer withholds a student loan garnishment at 10 percent, he can withhold another simultaneously at no more than 5 percent. According to the law firm of Bullivant, Houser and Bailey, child support wage garnishments and IRS wage levies generally take priority over other wage garnishments. According to the DOL, the employer should direct questions concerning the priority of garnishments to the issuing institution.
  
  

Violations

• If the employer violates Title III's wage garnishment laws, he may have to rehire the terminated worker, pay him back income and restore incorrectly garnished amounts. Willfully violating Title III's discharge laws can result in criminal prosecution and a monetary fine of up to $1,000.