Does Your Employer Have to Give You Warning Before Garnishing Your Wages?

A wage garnishment is a method used by creditors and others to force people to repay delinquent debts by automatically deducting payments from their wages each pay period. Employees receive advance notice about wage garnishments from an employer or lender in a few ways. However, you may be able to settle or dispute a debt to avoid a garnishment altogether.

Process

Creditors and debt collectors have to win a debt collection lawsuit against you to obtain a court order to garnish your wages. The order would be sent to your employer, and the Nolo law information website indicates employers must notify employees if they receive garnishment orders against them. Your employer also has to give you information on steps you can take to dispute a garnishment. Employers are obligated to follow a garnishment order and send the money deducted from your pay to the creditor or collector who initiated the order.

Tax Garnishments

The Internal Revenue Service doesn't need a court order to garnish your wages if you owe back taxes. However, the IRS would send a garnishment notice to your employer, and Nolo indicates your employer must provide you with a copy of that notice. The U.S. Consumer Credit Protection Act generally limits the amount of money garnished from workers pay to 25 percent of their post-tax income. However, those limits don't apply to delinquent taxes, so the IRS can take a larger portion of your wages if the agency sees fit to do so.

Other Garnishments

You would likely receive advance notice about some types of garnishments before your employer does. For example, the U.S. Department of Education sends garnishment notices to people who have defaulted on student loans at least 30 days before a garnishment is ordered. The advance notice gives a borrower time to dispute a garnishment or negotiate an agreement with the department to voluntarily repay the debt. The department can garnish 15 percent of a borrower's disposable income until a student loan is repaid.

Considerations

Try to settle debts before creditors and others seek to garnish your pay, because a wage garnishment could put your job at risk. The Consumer Credit Protection Act prohibits employers from firing workers due to a garnishment for one debt. That law doesn't protect you from losing your job if your earnings are garnished to repay several debts. However, some states prohibit companies from firing employees who face garnishment for more than one debt, according to the U.S. Department of Labor. Contact your state labor department on local garnishment restrictions.