APA Garnishments & Wage Deductions 3

Question 1

All states require employers to report new hires to a state directory primarily to support which garnishment-related function?

Accepted Answer

Child support income withholding order issuance

Answer

New hire reporting was mandated by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 to help child support agencies locate non-custodial parents and issue income withholding orders.

Question 2

When calculating the garnishable amount, the CCPA's 30x minimum wage floor means that an employee's disposable earnings must exceed this floor before any creditor garnishment can occur. If the federal minimum wage is $7.25/hour, what is the weekly protected floor?

Accepted Answer

$217.50

Answer

30 times $7.25 equals $217.50 per week, meaning disposable earnings must exceed $217.50 before any creditor garnishment can be taken.

Question 3

An employer receives a lump-sum payment order directing that a bonus be withheld for child support. What percentage of the lump-sum bonus is typically subject to withholding?

Accepted Answer

Up to 100% of the bonus depending on the order and arrears owed

Answer

Many states allow up to 100% of lump-sum payments such as bonuses to be seized for child support arrears, and employers are often required to notify the child support agency before paying the bonus.

Question 4

Under which circumstance should an employer stop withholding under an income withholding order for child support?

Accepted Answer

When the employer receives a notice to terminate the withholding from the issuing agency or court

Answer

An employer must continue withholding until the issuing child support agency or court sends an official order to terminate the withholding; the employee's request alone is not sufficient.

Question 5

Which statement about state garnishment laws is accurate?

Accepted Answer

If state law provides greater protection to the employee than federal CCPA limits, the employer must follow state law

Answer

When state law provides greater protections for employees than the federal CCPA minimums, the employer must apply the more protective state law.

(APA) American Payroll Association Certification Practice Test

(APA) American Payroll Association Certification Practice Test

APA Garnishments & Wage Deductions 3