Debtor B earns $20 per hour
Weekly Gross Earnings = $800.00 (calculation: $20 x 40 hours)
Less Required Deductions: $160.00 (SS, taxes & insurance)
Equals Disposable Earnings: $640.00
Garnishable Wages = $640 (disposable earnings)
Garnishable Amount = $160.00 each week ($640 x 25%)
Upon receipt of a writ of garnishment of wages, the employer now known as the garnishee must:
1. Reply to the writ within 30 days of receipt, indicating on the back of the form whether the debtor is employed, the rate of pay and any existing garnishments.
2. Determine the amount of "garnishable wages" for each pay period and withhold this amount from the debtor's pay unless there's an existing garnishment.
3. Once any existing garnishments or liens are paid in full or if there are no other garnishments, immediately begin withholding for this garnishment.
4. Report and distribute withheld wages no later than 15 days after the close of the employee's last pay period in the month.
5. If the debtor is terminated or stops working, notify the court and all parties including the judgment creditor.
6. If the debtor is re-employed within 90 days of termination, the garnishment remains in effect and you are required to comply with the original order.
7. The garnishment terminates 90 days after the end of the debtor's employment.
Penalties: If the garnishee fails to comply, the garnishee may be cited for contempt of court and assessed attorney's fees and court costs.
When a judgment is awarded by a court, wages of the defendant or judgment debtor can be garnished. Federal law limits garnishable earnings to 25% of the debtor's disposable income - the amount of earnings left after legally required deductions which include federal taxes, state taxes, Social Security, unemployment insurance and medical insurance.
However, debtors earning at or near minimum wage must be left with an amount equal to 30 times federal minimum wage.
The federal minimum wages is $7.25 per hour so the threshold of 30 times minimum wage equals 30 x $7.25 or $217.50
Debtor A earns $7.25 per hour (the federal minimum wage)
Weekly Gross Earnings = $290.00 (calculation: $7.25 x 40 hours)
Less Required Deductions: $58.00 (SS, taxes & insurance)
Equals Disposable Earnings: $232.00
Threshold: $217.50 (30 x $7.25)
Garnishable Amount = $14.50 each week