Do your supervisors know what weekly disposable earnings means in the context of wage garnishment? Do they know the maximum amount that may be withheld for family support and tax liens? Below is some information to convey to your supervisors.
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Get Your Report Now!Both wage garnishment and family support orders require employers to withhold money from an employee's weekly disposable earnings. What does this mean?
- "Disposable earnings" is the amount left of an employee's weekly paycheck after legally required deductions have been made. These deductions include federal, state, and local taxes; Social Security and Medicare; unemployment insurance; and state employee retirement systems.
- Other deductions that are not required by law are not subtracted from gross weekly earnings when calculating the amount of disposable earnings for garnishment or family support purposes. Such deductions might include health and life insurance, 401(k) contributions, and union dues.
The maximum amount of weekly disposable earnings that can be withheld for child and family support payments is substantial.
- It is 60 percent of weekly disposable earnings when an employee is not supporting another spouse or dependent child.
- If the employee is supporting another family member, however, the weekly maximum drops to 50 percent.
- If the employee is 12 weeks or more behind in payments, the percentages may be increased to 65 percent and 55 percent, respectively.
What is the maximum amount that can be taken from an employee's disposable earnings to satisfy a tax lien?
- That depends. The garnishment order itself should state the amount of back taxes owed by the employee and the kind of tax owed. The order will also provide instructions for calculating the amount to withhold from the employee's wages every week.
- Certain income is exempt from tax liens, including workers' compensation benefits, certain disability benefits, and money the employee must contribute to support dependent children.
The above information comes from BLR's presentation "Wage Garnishment and Family Support Withholding: What Supervisors Need to Know." For more information on all the training courses BLR has to offer, go to our Employee and Manager Training page.