Wage garnishment is a legal procedure to withhold a portion of an employee’s earnings. Wage garnishment typically occurs when a person owes a debt, such as child support, and their employer engages in withholding money from their paycheck.
An employer is prevented by Title III of a federal law, the Consumer Credit Protection Act (CCPA), for discharging an employee whose earnings have been subject to garnishment for a debt. This is true no matter how many levies or proceedings have been made to collect on the debt. Federal and Illinois laws do not limit the number of creditors who can collect on debts through wage garnishment.
How a Judgment Creditor Garnishes Wages
A creditor garnishes an individual’s wages by filing a lawsuit against them in civil court. If the creditor convinces the court that the debtor owes them a certain amount of money, the court enters a judgment, or court order, requiring the debtor to pay that amount.
The court must provide notice to the debtor that it is entering the order. The creditor then sends the judgment to the individual’s employer. The state of Illinois provides that an employer can withhold up to 15 percent of an employee’s gross income.
The Illinois Wage Garnishment Law provides that a wage garnishment cannot leave the employee with less than 45 times the state minimum wage as weekly take-home pay. As of January 1, 2022, the Illinois minimum wage is $12.00 per hour for workers 18 and older. This means an employer cannot engage in a wage deduction if the debtor’s take-home pay is less than $540. An employer may withhold money from wages, salaries and commissions.
Whose Wages Can Be Garnished
Any employee who receives a W-2 form from an employer can have their wages garnished. The owner of a corporation can see their wages garnished if they pay themselves through the company, and a freelance worker, independent contractor or self-employed worker cannot have their payments garnished.
The three traits of an independent contractor are: 1) The individual has been and will continue to be free from control and direction over the performance of their services, both under their contract or service and in fact; 2) the service that the individual performs is either outside the usual course of business or the service is performed outside of all the places of business of the enterprise; and 3) the individual is engaged in an independently established trade, occupation, profession or business.
What Debts May Be Satisfied
Common debts that allow an employer to make a wage deduction include child support, spousal support, certain student loans and back rent on a residential lease. Certain debt collectionss take priority over others. For example, child support, federal income taxes, state levies, bankruptcy payments and defaulted student loans typically take priority over debts from other entities.
Title III of the CCPA provides that only up to 50 percent of a worker’s disposable earnings may be garnished for child support or spousal support if the worker is supporting another spouse or child. Up to 60 percent of a worker’s disposable earnings may be garnished if the worker is not supporting another spouse or child. A party can garnish an additional 5 percent for support payments that are more than 12 weeks in arrears.
The federal law’s limitations on the amount of earnings that may be garnished do not apply to certain bankruptcy court orders or to debts due for unpaid federal or state taxes. If an Illinois wage garnishment law differs from Title III, the law resulting in the lower amount of earnings being garnished must be observed.
Multiple Orders for Child Support
An employer should honor only one wage garnishment order for current support for a child. When an employer receives multiple notices for the same child, the issuing agencies are responsible for resolving the issue. There are no exemptions to this rule.
The appropriate response to receipt of a second order for the same child is to continue to honor the first order received, give the employee a copy of the second order and contact the issuing agency that sent the second withholding order. The employer should explain it is already withholding payments for the child named in the order. The employer should also share payment information, such as the amount of withholding and where the withholding is being sent. Finally, the employer should contact the agency that sent the first withholding order and tell them about the second order.
If an employer receives multiple withholding orders for different children, they should follow federal regulations as to giving each family some portion of the payment. States have different laws that specify how payment should be allocated among the families. If Illinois is the employee’s principal place of employment, the employer must withhold and pay child support before all other garnishments.
Competing Garnishment Orders
The only exception to this rule is that an IRS tax levy entered before the underlying child support order was established will take precedence. If the debtor’s income is insufficient to cover the total of child support payments ordered, the employer withholds amounts according to a schedule for priority: current child support, health coverage premium, past due support and notice of levy or wage garnishment.
If there is not enough allowable disposable income, and the employee lives in Illinois, the employer may prorate the withholding by allocating a percentage to each order based on the total dollar amount of current support entered.
IRS Garnishment Procedures
The IRS uses the term “levies” to mean seizing a person’s wages. If the IRS levies an individual’s wages, the employer will send part of the employee’s wages to the IRS every pay period until the employee makes other arrangements to pay their overdue taxes, the levy is released, or the employee pays off the amount of overdue taxes that they owe.
Part of an individual’s wages may be exempt from a levy. The exempt amount is based on the individual’s standard deduction and an “amount determined” that is calculated partly on the number of dependents the individual is allowed for each year the levy is served. An employer will provide an employee whose wages are being garnished by the IRS with a statement of dependents and filing status that they must complete and return within three days.
If the employee does not return the statement in this time frame, their exempt amount is determined as if they are married filing separately with no dependents. If the individual has other income sources, the IRS may allocate the exemptions to the other income source. They may levy on 100 percent of the income from a particular employer. The IRS will release from levy the amount that an employee needs to pay for court-ordered child support that was ordered before the employer received the levy from the IRS.
Wage Deductions Relating to Employer
An employer may not hold an employee’s paycheck until they return their uniform, tools, pager or other employer-owned equipment. An employer is not allowed to deduct money from an employee’s pay for cash, inventory shortages or damages to the employer’s equipment or property, except if the employee signs an express written agreement allowing the deduction at the time it is made.
An employer cannot force an employee to pay for a uniform unless the employee signs an express written agreement at the time the deduction is made. An employer is allowed to make deductions from an employee’s pay for:
- Taxes and other such deductions that are required by law.
- Deductions for the benefit of the employee, such as health insurance premiums and union dues.
- Valid wage assignment or wage deduction order in effect.
An employer must provide an employee with an itemized statement of deductions for each pay period.
Wage Garnishments No Longer Suspended
As of January 2022, wage garnishments are in effect in Illinois. On June 25, 2021, Illinois Governor J.B. Pritzker issued Executive Order 2021-13, which allowed wage garnishments to resume. This order rescinded the portion of a COVID-19-related order, Executive Order 2020-25, which had suspended service of a garnishment summons, wage deduction summons and a citation to discover assets for a consumer debtor or consumer garnishee.
- Illinois Department of Labor: Deductions From Pay FAQ
- U.S. Department of Labor: Garnishment
- Illinois Compiled Statutes: 735 ILCS 5, Code of Civil Procedure
- Internal Revenue Service: Information About Wage Levies
- Illinois Department of Labor: Minimum Wage Law
- Illinois Office of the Governor: Executive Order 2020-25
- Illinois Department of Healthcare and Family Services: Child Support Services
- Illinois Department of Labor: Employer Misclassification of Workers
- Illinois Office of the Governor: Executive Order 2021-13
- U.S. Department of Labor, Wage and Hour Division: Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title III (CCPA)
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.