CPM Wage Garnishment Compliance 2

Question 1

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

Accepted Answer

25%

Answer

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.

Question 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?

Accepted Answer

Child support order, regardless of when received

Answer

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

Question 3

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

Accepted Answer

30 times the federal minimum hourly wage

Answer

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

Question 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?

Accepted Answer

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

Answer

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

Question 5

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

Accepted Answer

Wage and Hour Division of the DOL

Answer

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

(CPM) Certified Payroll Manager Practice Test

(CPM) Certified Payroll Manager Practice Test

CPM Wage Garnishment Compliance 2