Employer messed up and garnished is greater than 50%

[mpanethiere]

Hello I live and work in Kansas. I have a child support order that uses about 50% of my disposable income and sometimes right at 50% depending on how many hours I have. I also had a garnishment for a debt collector to Nebraska Furniture Mart and my employer was paying the garnishment as well and after going through and doing the math I have wrongfully been garnished $1,200 buy them paying that garnishment. My paychecks were decreased to 75 to 80% of my disposable income being garnished. I went to court and ask the judge to have the Nebraska Furniture Mart garnishment stopped because it was impossible for me to pay anything with bringing home practically nothing after child support and that garnishment. The judge inform me that total garnishments cannot exceed 50% of my disposable income. I relay this information to my employer and they have stopped paying the Nebraska Furniture Mart garnishment since but I don't know what to do about the $1,200 that was already wrongfully garnished. Any advice would be great. Thank you.

 

[Ohiogal]

Hello I live and work in Kansas. I have a child support order that uses about 50% of my disposable income and sometimes right at 50% depending on how many hours I have. I also had a garnishment for a debt collector to Nebraska Furniture Mart and my employer was paying the garnishment as well and after going through and doing the math I have wrongfully been garnished $1,200 buy them paying that garnishment. My paychecks were decreased to 75 to 80% of my disposable income being garnished. I went to court and ask the judge to have the Nebraska Furniture Mart garnishment stopped because it was impossible for me to pay anything with bringing home practically nothing after child support and that garnishment. The judge inform me that total garnishments cannot exceed 50% of my disposable income. I relay this information to my employer and they have stopped paying the Nebraska Furniture Mart garnishment since but I don't know what to do about the $1,200 that was already wrongfully garnished. Any advice would be great. Thank you.

You owed the money. It has now been paid. You get to deal with it.

 

[mpanethiere]

I'm not disputing that I owed the money. There's processes and parameters around garnishments for a reason.

 

[Ohiogal]

I'm not disputing that I owed the money. There's processes and parameters around garnishments for a reason.

And you went through the process. Now it is stopped. But you are not getting the money back.

 

[PayrollHRGuy]

According to the CCPA Title III

16b09 Excess garnishment withholdings are not wages.
29 CFR 531.39(b) states, “[w]hen the payment to a third person of monies withheld pursuant to a court order under which the withholding exceeds that permitted by the CCPA, the excess will not be considered equivalent to payment of wages to the employee for purpose of the Fair Labor Standards Act.” Therefore, amounts withheld by the employer from an employee’s earnings under a garnishment order in excess of the withholdings allowed by section 303 of the CCPA are not wages pursuant to section 3(m) of the FLSA. Accordingly, where such excess withholdings decrease wages below the compensation due under the FLSA a violation of that act exists. This is not altered by the fact that such excess withholdings are for the benefit of the employee, paid to a third person and the employer derives no profit or benefit from the transaction.

So you can file a claim with the DOL Wage & Hour Division if the excess deductions reduced your income to less than the minimum wage.

 

[Ohiogal]

According to the CCPA Title III

16b09 Excess garnishment withholdings are not wages.
29 CFR 531.39(b) states, “[w]hen the payment to a third person of monies withheld pursuant to a court order under which the withholding exceeds that permitted by the CCPA, the excess will not be considered equivalent to payment of wages to the employee for purpose of the Fair Labor Standards Act.” Therefore, amounts withheld by the employer from an employee’s earnings under a garnishment order in excess of the withholdings allowed by section 303 of the CCPA are not wages pursuant to section 3(m) of the FLSA. Accordingly, where such excess withholdings decrease wages below the compensation due under the FLSA a violation of that act exists. This is not altered by the fact that such excess withholdings are for the benefit of the employee, paid to a third person and the employer derives no profit or benefit from the transaction.

So you can file a claim with the DOL Wage & Hour Division if the excess deductions reduced your income to less than the minimum wage.

That still doesn't mean he will get the money back though.
I should have been a lot more clear and precise.
Also to add to what you said: https://www.dol.gov/whd/regs/compliance/whdfs30.pdf

However child support has DIFFERENT rules than that. Meaning that he owes the money regardless for child support. And child support is taxed to the obligor. So therefore, if the amount garnished by the Furniture store ALONE does not take him below minimum wage then the CCPA does not apply.

See also: https://www.thebalance.com/what-is-the-maximum-wage-garnishment-960675

 

[PayrollHRGuy]

I agree the CS is separate. Where the employer screwed up is that they didn't take into account the already present CC deductions when they added the debt garnishment.

As we take on a new client to handle their HR/Payroll duties I see something like this in about 1 out of 10 clients when looking at their previous payroll history. It is problematic to fix on an ongoing basis because the first thing the employee does when he get's his first check from us is see that he is getting paid more. If it weren't for the fact that most of them don't say anything because they think we are making an error there would be a lot of people contacting the DOL to try and get the back pay.

 

[Ohiogal]

I agree the CS is separate. Where the employer screwed up is that they didn't take into account the already present CC deductions when they added the debt garnishment.

As we take on a new client to handle their HR/Payroll duties I see something like this in about 1 out of 10 clients when looking at their previous payroll history. It is problematic to fix on an ongoing basis because the first thing the employee does when he get's his first check from us is see that he is getting paid more. If it weren't for the fact that most of them don't say anything because they think we are making an error there would be a lot of people contacting the DOL to try and get the back pay.

I don't necessarily think they have to take in child support. Child support does NOT count against the hourly wage when it comes to garnishments. So it would be income minus furniture garnishment and if that number is minimum wage or above then that is all that matters. Does it come into play with the actual amount by percentage the law allows to be garnished? Yes. But not regarding if the person is making above minimum wage after garnishments.

 

[PayrollHRGuy]

Short version.

The way you have to set up a debt garnishment has to leave the employee at least 30 times the federal minimum wage. CS has priority of debt garnishment in our system and it will not take a dime for the debt garnishment if it AND the CS drops the pay drops below that amount. While if there is a CS only at say 50% it will take half of the employee's income no matter what they are paid. If our system is wrong there are tens of thousands of employers doing it wrong.

 

[Ohiogal]

Short version.

The way you have to set up a debt garnishment has to leave the employee at least 30 times the federal minimum wage. CS has priority of debt garnishment in our system and it will not take a dime for the debt garnishment if it AND the CS drops the pay drops below that amount. While if there is a CS only at say 50% it will take half of the employee's income no matter what they are paid. If our system is wrong there are tens of thousands of employers doing it wrong.

Not saying you are wrong but just stating my understanding. I could be wrong as well. Everything I have seen though says CS is not a "debt garnishment".

 

[PayrollHRGuy]

You misunderstand me. CS is not debt garnishment and there is no protected income minimum when it is applied. But if there is a CS and debt garnishment on a single employee the CS comes out first. Then the debt garnishment is applied and if the CS reduced the income to the point where the the debt garnishment would be below the minimum allowed by law it simply can not be deducted or only deducted to the point where the employee reaches the minimum.

 

[Ohiogal]

You misunderstand me. CS is not debt garnishment and there is no protected income minimum when it is applied. But if there is a CS and debt garnishment on a single employee the CS comes out first. Then the debt garnishment is applied and if the CS reduced the income to the point where the the debt garnishment would be below the minimum allowed by law it simply can not be deducted or only deducted to the point where the employee reaches the minimum.

Now I understand what you are saying. Sorry. Not trying to misunderstand you. Thank you for this discussion. We have given OP a lot to consider.