Garnishment: What Employers Must Do
A garnishment order is a command to you, not to your employee. Ignore it and you can be liable for their entire debt. What to do when one arrives.
Garnishment
The order is addressed to you, the deadline that matters is not the one you think, and mishandling it can transfer somebody else's debt onto your balance sheet
An envelope arrives with a court seal on it. Inside is a document about one of your employees, a debt you knew nothing about, and a set of instructions.
The instinct at this point is to feel sorry for the person, or awkward about it, or to wonder whether you should say something. All understandable, and all beside the point, because you have misread what the document is.
It is not a notification about your employee. It is an order addressed to you. And the thing almost nobody tells small employers, the thing that turns this from an administrative nuisance into a genuine business risk, is this: if you mishandle it, in most states you can be made liable for your employee's entire outstanding debt. Not the amount you should have withheld. The whole thing.
Courts have imposed exactly that for errors as small as an answer that was filed on time but written incorrectly. So this guide is garnishment from the only angle that matters to you: what the order actually demands, what the deadline really is, how the liability transfers, and what to do in the first week. I build FirstHR, which does not run your payroll and does not withhold anything. Your payroll system does that. What it does not do is hold the order, track the deadline, and still have the file in three years when somebody asks. This is general information rather than legal advice, and garnishment procedure is state law, which means it varies enormously and a lawyer is a reasonable expense here.
What Garnishment Is
Garnishment is the legal procedure by which a creditor reaches money that belongs to a debtor but is being held by somebody else. When the money is wages, the somebody else is you.
The vocabulary around this is a mess and it is worth flattening. Wage garnishment, garnishing wages, garnished wages, paycheck garnishment, and payroll garnishment are all the same thing described from slightly different angles. A garnishment order, a writ of garnishment, an earnings withholding order, an income withholding order, and a notice of levy are all documents that do the same job: compel you to withhold. The differences between them are procedural rather than conceptual, and none of them change what is being asked of you.
What does change is the deadline, the cap, and who you send the money to. Those vary by type of debt and by state, and getting them wrong is what this article is about.
You Are the Garnishee
This is the reframing that makes everything else make sense, and small employers almost universally miss it on the first order they receive.
You did nothing wrong. You owe nobody anything. You are simply holding money that belongs to somebody who does owe something, and the law gives a court the power to reach through you to get it. That role has a name, and the name comes with duties of your own, and those duties are enforceable against you regardless of what your employee does or says or wants.
Per the Cornell Legal Information Institute, garnishment is a proceeding by a creditor to obtain satisfaction of a debt out of money or property of the debtor that is in the possession of a third party. You are the third party. The proceeding is happening around you and to you, and you are now a participant in it whether you wanted to be or not.
Which produces the single most important practical consequence in this entire article. The employee's debt is theirs. Your compliance obligations are yours. Those are two separate things, and only one of them can end up on your balance sheet.
The Liability Nobody Warns You About
Now the part that should genuinely change how you handle this.
Sit with the shape of that risk for a moment, because it is unusual.
In most compliance failures, the penalty scales with the failure. You withheld too little, so you owe the difference. You filed late, so you pay a percentage. Bad, bounded, survivable.
Here the penalty does not scale with anything. The amount you were supposed to withhold might be two hundred dollars a month. The amount you can end up owing is every dollar of a judgment you had nothing to do with, plus costs, plus the creditor's attorney fees. A creditor who suspects the employee is uncollectable has an obvious incentive to look very hard at whether the employer made a paperwork error, because you are a far better target than the person who actually owes the money.
And a default judgment against an employer can be entered without advance warning in some states. Which means the sequence is: an order arrives, you set it aside meaning to deal with it, and the next document you receive is a judgment against your company for somebody else's debt.
Who Can Garnish Wages
Five sources, and the difference between them is not academic. It determines the cap, the deadline, where the money goes, and whether anybody had to go to court at all.
The column worth staring at is whether a court was involved. An employer's mental model of garnishment usually involves a judge, a lawsuit, and a judgment. That model is correct for a creditor garnishment and it is wrong for everything else. Per the IRS guidance on wage levies, the IRS levies wages administratively. Treasury publishes its own employer guidance for administrative wage garnishment of federal debts. Neither involves a courtroom.
An employer who receives one of these and waits for a court order before acting is waiting for a document that does not exist and will never arrive, while the deadline runs.
What a Garnishment Order Looks Like
It arrives by sheriff, by process server, or by certified mail. It has a case number and a court name on it, or an agency letterhead. And buried in it, usually not on the first page and usually not in bold, are the three things you actually need.
Note what is not on that list: the employee's side of the story, whether the debt is fair, and whether the amount seems right. None of that is your business and none of it is your decision. You are being told to do something by a body with the authority to tell you.
What to Do When One Arrives
The first week, in order.
Steps two and five are where the entire risk lives, and it is worth stating the counterintuitive part plainly: the liability is not primarily about the money. It is about the paperwork you file with the court.
You can withhold the correct amount, from the correct base, on the correct schedule, and remit it perfectly to the correct party, and still be found liable for the entire debt because your answer was defective or because you did not file the subsequent ones. The money side is what feels important. The filing side is what actually carries the exposure.
The Answer Is the Whole Thing
A short section on the single document that determines whether this is routine or catastrophic.
The answer is your formal response to the court. It says whether the person works for you, what you owe them, and what you intend to withhold. It is filed with the court, not sent to the creditor, and it has a deadline set by state law.
Three things about it that employers get wrong.
First, you must answer even if the person does not work for you. Creditors send orders to possible employers, not confirmed ones. If you have never heard of the individual, you still file an answer saying so. Silence is not a response, and a non-answer can be treated as a default in exactly the same way as a late one.
Second, a defective answer is treated like no answer at all. Filing on time is necessary and it is not sufficient. There is reported caselaw of an employer that filed on time, filed incorrectly, and was held liable for the entire debt anyway. If the form is unclear and the amount at stake is meaningful, an hour of a lawyer's time is cheap against the alternative.
Third, some states want more than one. An answer at the start and then a further answer after each pay period. Employers who file the first and assume they are done have, in reported cases, been made liable for the entire outstanding debt for that omission alone.
How Much You Withhold
The caps differ by debt type, and every one of them except a tax levy is a percentage of disposable earnings.
| Type of debt | Federal cap | Calculated against |
|---|---|---|
| Ordinary creditor garnishment | The lesser of 25 percent, or the amount by which weekly disposable earnings exceed $217.50 | Disposable earnings |
| Child support, supporting another spouse or child | Up to 50 percent, plus 5 percent more where over twelve weeks in arrears | Disposable earnings |
| Child support, not supporting another | Up to 60 percent, plus 5 percent more where over twelve weeks in arrears | Disposable earnings |
| Defaulted federal student loan | Up to 15 percent | Disposable earnings |
| Other federal debt | Generally up to 15 percent | Disposable earnings |
| IRS or state tax levy | No percentage cap. An exemption table by filing status and dependents | Everything above the exempt amount |
Where a state law produces a smaller garnishment than the federal rule, the state law wins. A handful of states bar wage garnishment for ordinary consumer debt almost entirely. The federal caps are a ceiling on what can be taken, not a floor on what must be.
When There Are Several
More than one order for the same employee is common and the rule is not first-come-first-served.
Child support is withheld before all other garnishments, with a single exception: an IRS tax levy that was entered before the underlying support order was established. Per the guidance from the Administration for Children and Families, that levy is the only deduction that takes precedence over child support.
Note the wording, because it is a trap. The question is which was entered first, not which reached your desk first. And federal guidance acknowledges that employers generally do not know that date, which is why the recommended action when both are in play is to contact the issuing child support agency rather than to reason it out yourself.
The other thing to understand is that the cap applies to the total, not separately to each order. An employee already at the ceiling for child support has nothing available for a consumer creditor, and the correct response to that second order is to answer it saying exactly that. The full stack, including where voluntary deductions sit in it, is in the payroll deductions guide.
What You May Not Do
Several of these will feel unreasonable, and doing them anyway is how employers turn somebody else's problem into their own.
The second one is worth expanding, because it is the most common and the most sympathetic.
The employee comes to you. They explain that the debt is a mistake, or that they have made an arrangement, or that they simply cannot afford it this month. They ask you to hold off. They are not lying and they are not manipulating you; they usually believe every word.
You still cannot do it. You are complying with an order from a court or an agency, and only that court or agency can release you, in writing. If the employee thinks the order is wrong, the body they need to speak to is the one that issued it. Your sympathy is free and your compliance is not optional, and confusing the two makes you the person who ends up owing the money.
Telling the Employee
Many states require it. You should do it regardless, because the alternative is that they find out on payday when their check is short by three hundred dollars and nobody warned them. The deduction will appear on their pay stub, itemized, whether you have prepared them for it or not.
When They Leave
Two rules, and both catch employers out.
The first is that you cannot fire them because of the garnishment. Federal law prohibits discharging an employee because their earnings were garnished for any one debt, regardless of how many separate proceedings were brought to collect that one debt. The protection narrows for a second, separate debt, at which point federal law no longer bars discharge. But the first one is protected outright, and terminating over it is a violation in its own right, entirely separate from whatever else is going on.
The second is that when the employee leaves for any reason, you must notify the issuing court or agency. The garnishment does not lapse because they walked out, and quietly ceasing to withhold without telling anybody is itself a failure to comply. Most orders have a section for reporting the termination, and many jurisdictions impose a deadline. Some also provide that the order revives if you rehire the person within a defined window, which is worth knowing before you add it to your offboarding checklist as a one-line afterthought.
The Student Loan Wave
Worth a section, because a great many small employers who have never seen a garnishment order are likely to see their first one from a source they are not expecting.
Administrative wage garnishment for defaulted federal student loans was paused for years. In late 2025 the Department of Education announced it would resume, with the first notices going to roughly a thousand defaulted borrowers in early January 2026 and the volume increasing monthly. Then, in mid-January 2026, the Department announced a further temporary pause, without a timeline for when it would lift.
So the honest position is: it started, it stopped, and it is expected to resume. Which is not a reason to relax. There are millions of borrowers in default, the authority to garnish administratively has not gone anywhere, and when it does resume it will reach employers who have never processed a garnishment of any kind.
The Records You Will Need
Garnishment disputes are almost never arguments about money. They are arguments about whether you did what you were required to do, and when, and the entire question is settled by documents. Which makes this a document management problem wearing a payroll costume.
| What to keep | Why | When you will need it |
|---|---|---|
| The order itself, date-stamped on receipt | The deadline runs from service. The date you received it is the fact everything else depends on | Immediately, and again if the timing is ever questioned |
| The answer you filed, and proof of when | This is the document that carries the full-debt liability. Proving you filed it, correctly and on time, is the entire defense | In any dispute. This is the single most important record in the file |
| Every calculation of disposable earnings | The amount withheld has to be defensible, and the base you used is where errors hide | If the employee or the creditor disputes the amount |
| Every remittance, with proof of payment | You have to show the money went where it was supposed to, on time | If the creditor claims they were not paid, which happens |
| The notice you gave the employee | Required in many states, and it is the record that you did not blindside them | In a state that requires notice, or in any dispute with the employee |
| All correspondence with the court or agency | Including anything you were told by phone. Note the date, the person, and what they said | When somebody later disagrees about what you were instructed to do |
| The written release, when it comes | This is what entitles you to stop. Stopping without it is a compliance failure even if the debt really was satisfied | Whenever anybody asks why the withholding ended |
Common Mistakes
The thread through all of them is a single misunderstanding, and it is the one this article exists to correct. An employer reads a garnishment order as information about an employee, and files it emotionally under awkward. It is not information. It is an instruction to you, from a body that can enforce it against you, with a deadline that is already running.
Read that way, the correct response is obvious and it is not complicated. Find the deadline. Answer properly and on time. Withhold against the right base. Remit on schedule. Tell the employee once, privately, without commentary. Keep the file. Stop only when released in writing.
None of that is difficult. All of it is unforgiving. And the gap between an employer who does it and one who means to get to it next week is, in the worst case, somebody else's entire debt. The wider context is in what is payroll, and the retention rules for the resulting file in how long to keep employee records.
Frequently Asked Questions
What is garnishment?
Garnishment is a legal procedure that requires a third party holding money belonging to a debtor to redirect that money to a creditor. In the employment context, the third party is the employer and the money is wages. The critical thing for an employer to understand is that the order is addressed to you, not to your employee. It is not a notification that your employee has a debt problem. It is a legal command that you withhold part of their pay and send it somewhere else, and your obligations under it are your own rather than theirs.
What is wage garnishment?
Wage garnishment is any legal or equitable procedure through which a portion of a person's earnings is required to be withheld by their employer for payment of a debt. Most garnishments arrive as a court order, but not all: an IRS levy and an administrative garnishment for a defaulted federal student loan both compel an employer to withhold without any court judgment at all. Voluntary wage assignments, where an employee simply agrees to have money sent to a creditor, are not garnishments, because nothing is compelling anybody.
What does it mean to garnish wages?
To garnish wages means to withhold part of an employee's pay under legal compulsion and send it to a creditor rather than to the employee. From the employer's side, the money never becomes the employee's to spend: you deduct it before paying them and you remit it to whoever the order names. The employee is not being asked to pay a bill. Their pay is being intercepted, by an authority that has the power to compel you to do the intercepting, and to hold you responsible if you do not.
What is a garnishment order?
A garnishment order is the legal document that compels the withholding. Depending on the type of debt and the state, it may be called a writ of garnishment, an earnings withholding order, an income withholding order, or a notice of levy. What they have in common is that they are directed at the employer and they impose duties on the employer, typically including a deadline to formally respond to the court, a schedule for withholding, and a schedule for remitting the money. The document is not informational. It is an instruction with a deadline attached.
What is payroll garnishment?
Payroll garnishment is simply the operational side of the same thing: the process by which an employer sets up a garnishment order in payroll, calculates the correct withholding each period, deducts it, and remits it to the right place. It sits at the very end of the deduction sequence, after every tax and every voluntary deduction, and it is calculated against disposable earnings rather than against net pay. Those are different figures and confusing them is one of the more expensive mistakes available in this area.
What happens if an employer ignores a garnishment order?
In most states, the employer becomes liable for the employee's entire outstanding debt. That is not a penalty proportionate to what should have been withheld. It is the whole debt, and courts have imposed it for errors as small as filing an answer that was timely but defective. There is caselaw of an employer being ordered to pay more than ten thousand dollars because its original answer was flawed and it did not file the subsequent answers the state required. The exposure here is genuinely asymmetric: the amount you were supposed to withhold might be a few hundred dollars a month, and the amount you can end up owing is all of it.
What is the employer's answer to a garnishment?
The answer, also called a disclosure or a memorandum of garnishee depending on the state, is the formal response you file with the court telling it whether the person works for you and what you owe them. It is the single most important thing you will do in the entire process, and it is the thing employers most often get wrong. The deadline is set by state law and is short, often somewhere between 14 and 30 days from service. Some states require further answers after each pay period rather than only one at the start, and failing to file those is its own default.
How much of an employee's wages can be garnished?
It depends entirely on the type of debt. For an ordinary creditor garnishment, the federal cap is the lesser of 25 percent of disposable earnings, or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage, which is $217.50. Child support runs on higher limits, reaching 50 or 60 percent depending on whether the employee supports another spouse or child, with an additional 5 percent where payments are over twelve weeks in arrears. A defaulted federal student loan is capped at 15 percent. And an IRS levy is not a percentage at all: it runs on an exemption table based on filing status and dependents.
Is garnishment calculated on gross pay or net pay?
Neither, and this is the trap. It is calculated on disposable earnings, which is a distinct legal concept: gross pay minus deductions required by law, meaning taxes, Social Security, Medicare, and mandatory state contributions. Voluntary deductions such as health premiums and retirement contributions do not reduce disposable earnings even though they do reduce net pay. Which means disposable earnings are typically higher than net pay, and an employer who calculates the cap against net pay withholds too little and remains liable to the creditor for the shortfall.
Can I fire an employee whose wages are garnished?
Not for a single debt. Federal law prohibits discharging an employee because their earnings were garnished for any one debt, regardless of how many separate levies or proceedings were brought to collect that one debt. The protection narrows if the employee is garnished for two or more separate debts, at which point federal law no longer prohibits discharge, though state law may still protect them. The practical position is that terminating somebody over a first garnishment is a violation, and doing it over a second is a decision that needs legal advice rather than instinct.
My employee says the garnishment is a mistake. Can I stop withholding?
No, and this is one of the most common ways employers get themselves into trouble, precisely because the request sounds reasonable and the employee is usually sincere. They may genuinely believe it is an error, or genuinely have an arrangement with the creditor. None of that releases you. You are complying with an order from a court or an agency, and only that court or agency can release you, in writing. Until it does, you keep withholding. If the employee believes the order is wrong, the person they need to talk to is the court, not you.
What if there are multiple garnishment orders for one employee?
Priority applies and it is not first-come-first-served. Child support is withheld before all other garnishments, with one exception: an IRS tax levy that was entered before the underlying support order was established. Below child support come other federal debts, and below those, ordinary creditor garnishments, which frequently receive nothing because the levels above them have already consumed the cap. Note that the overall limit applies to the total across all orders, not separately to each one, so an employee at the cap for child support may have nothing available for a consumer creditor at all.
How long does a wage garnishment last?
Until the debt is satisfied or until you receive a written release, and the second half of that sentence is the operative one. You do not stop when your arithmetic says the balance should be cleared, because interest and costs may still be accruing on the underlying judgment and your calculation may simply be wrong. You stop when the court or the agency tells you in writing to stop. Employers who calculate a payoff themselves and stop early are frequently found to have underwithheld, and the shortfall is then theirs.
Do I have to tell the employee about the garnishment?
Generally yes, and in many states it is a formal requirement with its own timing rules, but it is worth doing regardless of whether it is required. The employee is going to find out on payday when their check is short. Finding out that way, with no warning and no explanation, converts an administrative matter into a personal one and produces a confrontation you did not need to have. Telling them in advance, privately, in writing, and unemotionally, takes ten minutes and defuses almost all of it.
What happens to a garnishment when the employee quits?
You have to tell the issuing court or agency, and the requirement is usually explicit rather than optional. The garnishment does not simply lapse because the person left, and quietly stopping without notifying anybody is itself a failure to comply. Many jurisdictions provide a specific form or a section of the original order for reporting the termination, and some impose a deadline for it. Get the notification out promptly, and be prepared for the possibility that the order will follow the employee to their next employer, or come back if you rehire them within a defined period.
Can I charge a fee for processing a garnishment?
In many states yes, and it is worth knowing about because the administrative burden is real and falls entirely on you. Most states permit an employer to charge the employee a modest fee for processing an income withholding order, and the permitted amount is set by state law. It is generally small, on the order of a few dollars per payment, and it does not come close to covering the actual work involved. But it exists, it is lawful where the state allows it, and a fair number of small employers do not realize they are entitled to it.
Does a garnishment for a student loan require a court order?
No, and this is what makes administrative wage garnishment different from what most employers expect. The Department of Education can direct an employer to withhold from a defaulted federal student loan borrower without ever going to court, under authority granted by statute. There is no judge, no judgment, and no lawsuit. The borrower receives advance notice and has a right to request a hearing, but from the employer's perspective the instruction simply arrives, and it is as binding as anything a court would send.
What records do I need to keep for a garnishment?
Everything, and retrievably. The order itself, the answer you filed and the date you filed it, every calculation of disposable earnings, every amount withheld, every remittance with proof of payment, all correspondence with the court or the agency, the notice you gave the employee, and eventually the release. The reason to be thorough is that garnishment disputes are almost always about paperwork rather than about money, and the employer who can produce a complete file is in a fundamentally different position from the one who is reconstructing events from memory.
What is the difference between a garnishment and a levy?
A levy is a specific type of garnishment used by tax authorities, and it behaves differently from an ordinary one in ways that matter. An IRS levy does not require a court judgment, arrives directly from the agency, and is not capped as a percentage of disposable earnings. Instead of a percentage, the IRS publishes an exemption table based on the employee's filing status and number of dependents, and everything above the exempt amount is taken. Applying the ordinary 25 percent rule to a levy is a standard employer error and it will produce the wrong number.
We have never received a garnishment order. Should we prepare for one?
Yes, because the moment you receive one is the worst possible moment to work out what to do. The deadline to respond is already running, it is short, and it is set by a state law you have not read. Research indicates that a meaningful share of US workers have had wages garnished, and that the rate is higher at small firms than at large ones. The preparation is not elaborate: know who opens the mail, know that a garnishment order goes straight to whoever handles payroll, and know that the first question to answer is what the deadline is rather than what the amount is.