2. OVERVIEW
What is CCAP
Who is Covered
What is Wage Garnishment
Federal Laws
Protection and Restrictions
Examples
Additional Assistance
3. WHAT IS CCPA
Administered by the Wage and Hour Division
Protects employees from discharge by their employers because
their wages have been garnished for any one debt
Limits the amount of an employee's earnings that may be
garnished in any one week
4. WHO IS COVERED
All employers and individuals who receive earnings for personal
services including:
Wages
Salaries,
Commissions
Bonuses
Periodic payments from a pension or retirement program
Does not include tips
Applies to all 50 states, District of Colombia and all U.S.
territories/possesions
5. WHAT IS WAGE GARNISHMENT
Any legal or equitable procedure where portion of person’s
earnings is withheld by an employer for debt payment
Typically made by court order
Types of legal equitable procedure include:
IRS
State Tax Collection
Does NOT include voluntary wage assignments
Employee volunteers that specified amount of earnings be turned over to a
creditor(s)
6. FEDERAL LAWS
Tittle III administered by the Wage and Hour Division of the U.S.
Department of Labor’s Employment Standards
Has no other authority with regard to garnishments
For questions on amount withheld refer to court or agency
initiating action
7. PROTECTION AND RESTRICTIONS
Employers are prohibited from discharging employee due to wage
garnishment
Regardless of number of levies made or proceedings brought to collect that
debt because of SINGLE garnishment
IMPORTANT
Employers may discharge an employee because earnings are
separately garnished for two or more debts
Managers be aware of the difference
1= no discharge
< 2= ability to discharge
8. PROTECTION AND RESTRICTIONS
The amount of pay is subject to an employees “disposable earnings”
The amount left after legally required deductions
Examples:
Federal tax
State tax
Local tax
Social security
Retirement withholding required by law
Deductions not required by law are NOT subtracted from gross earnings
when calculated under CCPA
Examples:
Health insurance
Union Dues
Voluntary wage assignments/ charitable donations
9. EXAMPLES
Scenario 1:
An employee's gross earnings in a particular workweek are $402.00. After
deductions required by law, the disposable earnings are $368.00. In this week, 25
percent of the disposable earnings may be garnished. ($368.00 × 25% = $92.00)
The employee would be paid $276.00.
Scenario 2:
An employee paid every other week has disposable earnings of $500.00 for the
first week and $80.00 for the second week of the pay period, for a total of $580.00.
In a biweekly pay period, when disposable earnings are at or above $580.00 for
the pay period, 25% may be garnished; $145.00 (25% × $580.00) is subject to
garnishment. It does not matter that the disposable earnings in the second week
are less than $217.50.
12. OVERVIEW
What is CCAP
Who is Covered
What is Wage Garnishment
Federal Laws
Protection and Restrictions
Examples
Additional Assistance
Editor's Notes
The law protects anyone who receives any of the personal earning methods listed on the slide. Additionally, it applies to all 50 states, DO Colombia as well as all U.S. territories and possessions.
Next, lets define what a wage garnishment is. A wage garnishment is any legal or equitable procedure through which some portion of a persons earning is required to be withheld by an employer for the payment of debt. Most of these requirements are court mandated. Additionally, the IRS and state tax agencies may require wage garnishments for any taxes owed. Please note that wage garnishments do not include voluntary assignments that the employee has elected to participate in.
Next lets discuss what federal law covers all employees under this act. Tittle II admnisitered by the Wage and Hour Division limits the amount of earnings that may be garnished. However, Tittle II has no other authority in reference to wage garnishments. For questions on the amount withheld please have the employee refer back to their mandated order.
Next lets discuss the protections and restrictions associated with wage garnishment. Under Tittle III an employer may NOT discharge and employee for a single wage garnishment. However, and this is important, Tittle III does not protect employees from being fired if they have more than one garnishment being required of them.
Continuing on with protection and restrictions lets talk about some restrictions associated with wage garnishment. Some key things to keep in mind is what portion of you pay is actually calculated as deductible? The deductible amount is based on the amount left after federal, state and local taxes are pulled as well as social security and legally required retirement withholdings. CCPA does not include voluntary deductions into the pay amount such as health insurance, union dues or any other voluntary wage assignments.
In order to avoid confusion and protect ourselves from violating Tittle III lets talk through 2 examples.
