Wage Garnishments: What Small Business Owners Need to Know

Have you received a notice that your employee is subject to wage garnishments? You might be wondering what this means and how to proceed moving forward with it. PayWow has all of the answers you need! 

With PayWow, adding a wage garnishment to your payroll is simple! But, before we get ahead of ourselves, let’s discuss what exactly a wage garnishment is!

What is a wage garnishment? 

A wage garnishment is a legal procedure in which a person’s earnings are required by court order to be withheld by an employer for the payment of a debt. Common examples of wage garnishment include child support, student loans, medical bills, or consumer debts.

The deduction is taken out after payroll taxes and withholding but before other tax-free deductions such as insurance and 401(k) contributions. 

How will you know if your employee has a wage garnishment?  

Employers with workers who have a wage garnishment will receive a “writ of garnishment” from a court or government agency. Once the employer receives this document, they should notify their employee of the garnishment. The employer will then become responsible for consistently withholding and submitting the garnishment to the creditor or agency. If an employer does not comply with the garnishment order, it can result in costly penalties. 

How much of an employee’s paycheck can be garnished? 

There are limits placed on how much money creditors can take from your paycheck. The garnishment amount is limited to 25% of the employee’s disposable earnings or the amount that your income exceeds 30 times the federal minimum wage, whichever is less. Disposable earnings are what’s leftover after legally required deductions are taken from your paycheck. Certain states have a lower percentage limit for how much can be garnished. 

Can an employee have multiple wage garnishments? 

Yes, an employee can have multiple wage garnishments. According to federal law, employers cannot discharge employees if they have one wage garnishment. But, if an employee is subject to multiple wage garnishments, federal law will not protect them. 

How does a wage garnishment end? 

There are a few different ways a wage garnishment may end. The garnishment notice may include a specific end date, regardless of the total amount owed. Another wat is if the employee’s debt is paid off or if the employer received a notice of termination for a wage garnishment. If any of these are the case, the employer should stop withholding the garnishment from the employee’s pay. 


Adding/Updating an employee wage garnishment is quick and easy with PayWow. Once an employee’s wage garnishment details are input into the payroll, PayWow will ensure that it appears correctly on each paycheck. We have a helpful blog listing all of the steps to add/update a wage garnishment on PayWow. Check out that blog here! 

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