APA Garnishments & Wage Deductions

Question 1

Under Title III of the Consumer Credit Protection Act (CCPA), what is the maximum percentage of an employee's disposable earnings that a creditor garnishment can attach?

Accepted Answer

25%

Answer

Title III of the CCPA limits creditor garnishments to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage.

Question 2

How does the CCPA define 'disposable earnings' for garnishment calculation purposes?

Accepted Answer

Wages remaining after mandatory deductions required by law

Answer

Disposable earnings are the wages remaining after legally required deductions such as taxes, Social Security, Medicare, and state unemployment insurance — not voluntary deductions.

Question 3

An employee has disposable earnings of $400 per week. The federal minimum wage is $7.25/hour. What is the maximum a creditor can garnish per week?

Accepted Answer

$100.00

Answer

The lesser of 25% of $400 ($100) or $400 minus 30×$7.25 ($182.50) is $100, so the maximum creditor garnishment is $100.

Question 4

When an employee has both a child support withholding order and a creditor garnishment, which obligation generally takes priority?

Accepted Answer

Child support withholding order, by federal law

Answer

Federal law gives child support and spousal support withholding orders priority over all other garnishments, including creditor and tax levies in most states.

Question 5

Under the CCPA, what protection does an employee receive regarding employment when subject to a single garnishment?

Accepted Answer

Employers cannot discharge the employee because of that garnishment

Answer

The CCPA prohibits an employer from discharging an employee solely because earnings have been subjected to garnishment for any one indebtedness.

(APA) American Payroll Association Certification Practice Test

(APA) American Payroll Association Certification Practice Test

APA Garnishments & Wage Deductions