Payroll 110 Badge #07 - Garnishments and Wage Assignments-Payroll 110 Badge #7

Payroll 110 Badge #7 - PowerPoint

Pdf Summary

Badge #7 (Garnishments and Wage Assignments) explains how payroll professionals must comply with federal and Washington State rules when processing involuntary deductions from employee earnings, including creditor garnishments, child support, bankruptcy orders, IRS levies, and defaulted student loans. Federal protections come primarily from the Consumer Credit Protection Act (CCPA), enforced by the U.S. Department of Labor, while Washington garnishment procedures are governed by the Revised Code of Washington and OFM guidance (Administrative & Accounting Manual 25.60). Garnishment paperwork must be retained securely for at least six years after an order is satisfied.<br /><br />The course defines a wage assignment as a legal process requiring an employer to withhold earnings to pay a debt. It distinguishes voluntary wage assignments (employee-initiated, submitted in writing, and generally not regulated—employees may start/stop anytime) from involuntary actions such as wage attachments, garnishments, and levies. Examples include child support and federally guaranteed student loans (attachments), 60‑day creditor writs (garnishments), and IRS tax levies (levies).<br /><br />Key pay concepts are clarified: gross pay, net pay (after all mandatory and voluntary deductions), disposable pay (gross minus only legally required deductions), and “take home pay” for federal levies (deductions in place before a levy; deductions are frozen during the levy with limited exceptions). For Washington child support, orders must be implemented on the next regular payroll, answered within 20 days, and remitted within seven working days of pay date. Washington allows up to 50% of disposable earnings (federal maximum may be higher, but the rule most beneficial to the employee applies). Child support has highest priority, followed by bankruptcy, then creditor garnishments; a small processing fee may be charged.<br /><br />For creditor writs, employers must respond within 20 days, withhold for only 60 calendar days, and generally may withhold up to 20% of disposable earnings while ensuring exemptions (including a minimum protected amount based on 35 times minimum wage). Withheld creditor funds are held until an “Order to Pay” (or returned upon a quash/stop order). Bankruptcy (e.g., Chapter 13) can require withholding amounts set by the court and typically stops non–child support garnishments/assignments. IRS levies are continuous until released and are calculated using IRS Publication 1494; employer noncompliance can create employer liability for tax, plus interest.

Keywords

Washington State garnishment rules

Consumer Credit Protection Act (CCPA)

involuntary payroll deductions

wage assignments (voluntary vs involuntary)

child support withholding priority

creditor writ garnishment 60-day hold

bankruptcy Chapter 13 payroll withholding

IRS tax levy continuous withholding

disposable earnings calculation

garnishment record retention six years