Garnishing Wages and the Federal Cap
Federal law sets a floor of protection that applies in every state: a weekly ceiling calculated from disposable earnings, with a wage level below which nothing may be taken at all. Many states protect a great deal more, and the stricter rule governs.
The rule in short
The Consumer Credit Protection Act limits an ordinary garnishment to the lesser of twenty-five percent of weekly disposable earnings or the amount by which those earnings exceed thirty times the federal minimum hourly wage. Disposable earnings are what remains after deductions required by law. Support orders, tax debts and bankruptcy orders fall outside the ordinary ceiling. States may and often do set lower limits, and the more protective rule controls.
A wage garnishment is an order served on an employer, not on the person who owes the money. The employer becomes responsible for calculating a withholding each pay period and remitting it, and the calculation is the same one everywhere in the country as a minimum. Federal law fixes a ceiling that no state may exceed. What varies, sometimes dramatically, is how much further a state goes in protecting earnings below that ceiling.
What counts as disposable earnings
Every part of the calculation depends on a defined term. Earnings are compensation paid or payable for personal services, whether called wages, salary, commission or bonus, and the definition extends to periodic payments from a pension or retirement program. Disposable earnings are what remains after deducting amounts required by law to be withheld. That covers income tax withholding, Social Security and Medicare, and compulsory retirement contributions where an employee has no choice about them.
Voluntary deductions are not subtracted. Health insurance premiums, elective retirement savings, union dues, charitable giving and repayments of an employer loan all come out after the garnishment is computed, not before. Employers regularly make the opposite assumption and under-withhold, which produces a shortfall the employer may be answerable for. The definitions appear in section 1672 of title 15, and the Department of Labor restates the arithmetic in its own rule.
The two-part federal ceiling
For an ordinary judgment debt the maximum that may be taken from a workweek's disposable earnings is the lesser of two figures. The first is twenty-five percent of disposable earnings for that week. The second is the amount by which disposable earnings for that week exceed thirty times the federal minimum hourly wage. Whichever figure is smaller is the ceiling, and the second figure creates a protected base: a week in which disposable earnings do not exceed thirty times the minimum wage yields nothing at all.
The test is applied per workweek, so it self-adjusts for short weeks, unpaid leave and irregular schedules without anyone having to intervene. Pay periods longer than a week are handled by converting the thirty-times figure into an equivalent multiple for a biweekly, semimonthly or monthly cycle. The ceiling is a maximum for all ordinary garnishments together, not a maximum per creditor, which is what makes the order of payment among competing garnishments a separate problem.
Reading the twenty-five percent figure as an entitlement is the most common error in this area. It is the outer limit of what any garnishment may reach, and a state is free to allow far less. Where a state caps the deduction lower, forbids garnishment for a category of debt, or exempts an income level outright, the state rule is the one the employer follows. Federal law expressly preserves those stricter protections.
Where states protect more
California allows a levy of the lesser of twenty percent of disposable earnings or forty percent of the amount by which weekly disposable earnings exceed forty-eight times the state minimum hourly wage. Both halves of that test are more protective than the federal version, and the state minimum wage is the reference point rather than the federal one. Minnesota uses a sliding scale instead, permitting twenty-five, fifteen or ten percent depending on how far weekly income rises above stated multiples of the minimum wage, with a protected floor set at forty times the greater of the state or federal figure.
Florida takes a different route entirely. The disposable earnings of a head of family are exempt outright below a stated weekly amount, and above it are still exempt unless the debtor has agreed in writing to the garnishment; a person who is not a head of family is subject only to the federal limit. Several states go further and bar wage garnishment for ordinary consumer debts altogether, leaving creditors to pursue accounts, vehicles and land instead.
Federal law contemplates this divergence rather than tolerating it grudgingly. One provision preserves state rules that prohibit garnishment or allow less of it; another lets the Secretary of Labor exempt a state from the federal restriction entirely where that state's own law gives substantially similar protection. The result is that the twenty-five percent figure is rarely the operative number outside the states that have simply adopted the federal test as their own.
| Jurisdiction | Ordinary ceiling | Protected base |
|---|---|---|
| Federal floor | Twenty-five percent of disposable earnings | Thirty times the federal minimum hourly wage |
| California | Twenty percent, or forty percent of the excess | Forty-eight times the state minimum wage |
| Minnesota | Twenty-five, fifteen or ten percent by income band | Forty times the greater minimum wage |
| Florida, head of family | Nothing without written consent | The full weekly amount set by statute |
| Ohio | The federal ceiling | A written demand before any order issues |
The orders that sit outside the cap
Three categories are treated separately. Support orders may reach half of disposable earnings where the debtor is supporting another spouse or dependent child, and a larger share where the debtor is not, with a further increment permitted when arrears have run beyond twelve weeks. An order of a bankruptcy court and a debt due for state or federal tax are excluded from the ordinary ceiling altogether, and tax collection operates under its own levy statutes and its own exempt-amount tables.
Because those categories can consume most of a paycheck, an employer holding both a support order and an ordinary judgment garnishment often has nothing left to apply to the judgment. Ohio adds a procedural step ahead of any of this by requiring a written demand to the debtor before an order for garnishment of personal earnings may issue, giving a fifteen-day window in which payment or an alternative arrangement can be made.
The employer's position
The employer is a stakeholder with real exposure. Withholding too little can make the employer liable for the shortfall; withholding too much invites a claim from the employee. The order is served, the employer answers it stating whether the person is employed and what the earnings are, withholds each period, and remits to the court or the creditor as the order directs. Most states allow a small processing fee.
Federal law also limits the employment consequences, barring discharge because earnings have been garnished for any one indebtedness, with penalties for a willful violation; some states extend that protection to multiple garnishments. Funds that survive the payroll calculation and reach a bank account raise a separate question, since deposits can carry protection of their own, and property outside wages is governed by the state's exemption statutes.
An employer served with an order from another state faces a further wrinkle. Which state's ceiling applies is generally treated as a question for the law of the place where the employee works, and a creditor holding a judgment entered elsewhere usually has to establish the judgment locally before an employer can be reached at all. Payroll processors handling several states resolve this by applying whichever available limit yields the smallest deduction.
Points to carry away
- Disposable earnings are gross pay less deductions required by law, not less voluntary deductions.
- The ordinary weekly ceiling is the lesser of twenty-five percent of disposable earnings or the excess over thirty times the federal minimum hourly wage.
- Nothing may be garnished in a week when disposable earnings do not exceed thirty times that minimum wage.
- Support orders reach a much larger share of disposable earnings, and tax and bankruptcy orders sit outside the ordinary cap.
- California, Minnesota and Florida each protect more than the federal floor, and the state limit governs where it is stricter.
Questions readers ask
Are voluntary deductions subtracted before the cap is applied?
No. Disposable earnings are gross earnings less amounts required by law to be withheld, which covers income tax withholding, Social Security and Medicare, and mandatory retirement contributions where they are compulsory. Health insurance premiums, union dues, elective retirement savings, charitable giving and loan repayments are voluntary, so they are not subtracted first. The distinction matters because subtracting them would lower disposable earnings and therefore lower the amount a creditor can reach, which is not what the statute allows.
What happens in a week with unusually low pay?
The ceiling is applied week by week, so a short week is protected automatically. If disposable earnings for that workweek do not exceed thirty times the federal minimum hourly wage, the second half of the lesser-of test produces zero and nothing may be taken. The employer withholds nothing for that period and resumes when earnings rise again. Employers paying on other cycles convert the figure using equivalent multiples for a biweekly, semimonthly or monthly period rather than recalculating the rule.
Can an employer fire someone whose wages are garnished?
Federal law restricts it. Section 1674 of title 15 bars discharging an employee because earnings have been subjected to garnishment for any one indebtedness, and provides penalties for a willful violation. The protection is limited: it addresses a single debt, and an employee garnished for several separate debts falls outside the federal shield. A number of states extend the protection further, some barring discharge regardless of how many garnishments an employer has to process.
Sources
- 15 U.S.C. § 1673Sets the ordinary garnishment ceiling and the higher limits for support, tax and bankruptcy orders.
- 15 U.S.C. § 1674Restricts discharge of an employee whose earnings are garnished for one indebtedness.
- 15 U.S.C. § 1677Preserves state laws that prohibit garnishment or allow less of it than federal law does.
- 29 C.F.R. § 870.10States the Department of Labor's formulation of the maximum part of disposable earnings.
- California Code of Civil Procedure § 706.050Caps the levy at twenty percent of disposable earnings or forty percent of the excess over forty-eight times the state minimum wage.
- Minnesota Statutes § 571.922Applies a sliding scale of twenty-five, fifteen and ten percent tied to multiples of the minimum wage.
- Florida Statutes § 222.11Exempts the disposable earnings of a head of family below a stated weekly figure entirely.
Rapid Response Law is a publication, not a law firm. This article states general rules and cites its sources; it is not advice about any particular case, and the law differs by state and changes over time.
More in Judgment Enforcement
Examining the Debtor About Assets
A judgment creditor may compel the debtor to appear and answer under oath about property, income and transfers. California issues the order ex parte if no examination has occurred in the preceding 120 days, and requires personal service at least 30 days ahead; service itself creates a lien on the debtor's personal property for a year. New York runs the same inquiry through subpoena practice. Non-appearance is punished by contempt or arrest.
Protected Funds Once They Reach a Bank Account
A bank served with a garnishment order must review the account for federal benefit deposits over a two-month lookback and leave a protected amount accessible, with no requirement that the account holder assert an exemption. Social Security and veterans benefits carry their own statutory shields. Exempt wages deposited into an account are protected in some states if they can be traced, and lost when they cannot.
Reaching Assets in Another State
The Constitution requires a state to honor another state's judgment, and registration statutes supply the mechanism. Most states accept a certified copy filed with the clerk, which is then treated as a local judgment. Florida bars execution until thirty days after the clerk mails notice; California uses an application and entry of a new judgment, with a motion to vacate available on defenses to an action on the sister-state judgment.