Overview: Employers are often ordered by either a court or a government agency to make deductions from employees' wages to satisfy a debt. Employers must implement payroll withholding pursuant to these orders in addition to amounts required by law, such as income and employment taxes. These pay deductions can collectively be referred to as involuntary simply because employees do not request that they be made. Involuntary deductions include those for:
Employers need to be well versed in how to handle these types of orders because they often must be implemented immediately upon receipt and because employers are subject to serious penalties if they do not comply with them. An employer that receives any type of withholding order should be prepared to answer all, or at least some, of the following questions:
Note that the amount that may be withheld for child support orders, creditor garnishments, student loan and federal agency debt garnishments is limited by the Consumer Credit Protection Act (CCPA). Federal tax levies and bankruptcy orders are not subject to the CCPA limits.
In addition, the basic rule of priority among the different types of involuntary withholding orders is that federal tax levies must be satisfied before any other type of withholding order, except for child support withholding orders dated before the date of the levy and certain bankruptcy orders. Additional rules of priority apply within each type of order if an employee is subject to more than one.
Author: Rena Pirsos, JD, Legal Editor
Updated to reflect the requirement to remit child support payments electronically, effective September 17, 2019.
Updated to include garnishment withholding limits on consumer debts, effective July 28, 2019.
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Updated to include a creditor garnishment exemption for certain disposable earnings, effective July 1, 2019.
Updated to reflect amended child support withholding noncompliance penalties, effective July 1, 2019.
Updated to reflect a forthcoming increase in the creditor garnishment withholding limits.
An explanation of the issues involved in complying with involuntary pay deductions.