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Wage Garnishment Compliance Flashcards

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  1. Under the Consumer Credit Protection Act (CCPA), what is the maximum percentage of disposable earnings that can be garnished for ordinary consumer debts?

    Answer: 25%

    The CCPA limits garnishment for ordinary consumer debts to 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less.

  2. An employee has a child support order for $400/week and a creditor garnishment for $150/week. Disposable earnings are $900/week. Which garnishment takes priority?

    Answer: Child support order, regardless of when received

    Child support and alimony orders have priority over all other garnishments under federal law.

  3. What is the federal minimum wage threshold used to calculate the protected earnings floor for garnishment purposes?

    Answer: 30 times the federal minimum hourly wage

    Federal law protects disposable earnings up to 30 times the federal minimum wage ($7.25/hr = $217.50/week) from garnishment.

  4. A payroll manager receives a creditor garnishment for an employee who is already subject to a child support withholding order consuming 55% of disposable earnings. What should the payroll manager do?

    Answer: Honor only the child support order; no room remains for the creditor garnishment

    Because the child support order already reaches the CCPA maximum for support orders, no disposable earnings remain available for the creditor garnishment.

  5. Which federal agency enforces the CCPA's wage garnishment provisions for private-sector employees?

    Answer: Wage and Hour Division of the DOL

    The Wage and Hour Division (WHD) of the U.S. Department of Labor enforces the CCPA's wage garnishment restrictions.

  6. When does the CCPA's anti-retaliation protection for garnished employees expire?

    Answer: It only applies to the first garnishment ever received

    The CCPA prohibits discharge of an employee for having earnings subject to garnishment for any ONE indebtedness; it does not protect employees with two or more garnishments.

  7. A state law allows garnishment of up to 10% of disposable earnings, while federal law allows 25%. Which rule applies?

    Answer: State law applies because it is more protective of the employee

    When state law provides greater protection to the employee (lower garnishment limit), the state law prevails over federal law.