Wednesday, July 30, 2008

Garnishment Laws in Louisiana

The state of Louisiana follows federal rules for wage garnishment. Wage garnishment is applied against disposable income -- earnings that remain after deductions are made. These deductions include withholding tax, Social Security and employer deductions for items such as health insurance and retirement.

Employer Guidelines

    Louisiana wage garnishments are immediately effective when the employer receives notice. The employer must set up the withholding amount, 25 percent of the disposable income. Deductions are made from each paycheck, and the employer must remit them monthly.

Employer Rights and Requirements

    The employer must provide the Louisiana court with information on the employee, such as rate of pay and whether or not there are other garnishments. The employer may withhold a $3 per pay period processing fee from the nonexempt income. If the employee owes funds to the employer, the court may allow the employer to have a creditor holding before the garnishment.

Exemptions

    Retirement funds such as 401(k)s, pensions and proceeds from IRAs do not count as disposable income. Seventy-five percent of disposable income is exempt. However, this exemption cannot be less than 30 times the minimum federal hourly wage, $7.25 per hour as of July 24, 2009. Child support has a different exemption -- 50 to 60 percent of disposable income.

Miscellaneous

    In Louisiana, garnishments remain in effect until everything due is paid, which can include interest, court costs and attorney's fees. Garnishment cannot be used for payments of a debt that has an interest rate of 10 percent or more. An employee cannot lose her job because of one garnishment. The employee can be fired if there are three or more unrelated garnishments over a two-year period.

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