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Can an Employer Garnish My Benefits?

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Accidents happen all the time in the workplace, across all professions. Receiving workers’ compensation from your employer is a vital part of being able to keep an injury from affecting your entire life. Luckily, federal law usually protects these benefits from garnishment.

What Is Garnishment?

Garnishment is a legal order for your employer to keep some of your earnings and send them to any of your creditors. There are specific types of income that employers can garnish.

Types of Income Garnishment

Wage garnishment is the most common type of garnishment. For consumer debts such as car loans and credit card payments, employers can garnish a maximum of 25% of an employee’s pay and send it to pay those debts. Employers can garnish up to 50% of an employee’s salary for payments such as child support and federal tax debt.

Whether an employer can garnish payments outside of your salary depends on if the law considers those payments income. Federal law considers bonuses and commissions income and will subject them to garnishment; however, most states do not allow garnishment on tips.

Employers usually cannot garnish unemployment benefits unless you received severance from your former employer. Federal law considers severance a form of income. The government protects Social Security Disability benefits and pensions from garnishment unless the payments are going to child support or federal taxes. Employers can only garnish Veterans Affairs benefits if the payment is going to child support or income taxes. Employers cannot garnish Veterans Affairs benefits for consumer debts.

The federal government qualifies income related to investments such as stock earnings or payments from rental properties as income, allowing your employer to garnish them.

Garnishment in California

Under California law, creditors need a court order to get wage garnishments. In situations where debt includes income taxes that are unpaid, court-ordered child support, child support arrears, and defaulted student loans, a court order is not required.

Unlike some other states, California has not created stricter laws for garnishment. California garnishment follows the rules that the federal government outlined, allowing creditors to take the lesser of 25% of your earnings or the amount that your weekly disposable income exceeds 40 times the state hourly minimum wage. You can be subject to garnishment for more than one debt, but your employer can still only take a maximum of 25% of your pay.

Workers’ Compensation and Garnishments

The federal government usually protects workers’ compensation payments from garnishment. The government considers workers’ compensation a public benefit, so federal law protects these benefits. Depending on the state, however, there can be exceptions. California law allows employers to garnish workers’ compensation if the payments are going toward child support, income taxes, or student loans.

Though California and federal laws protect your workers’ compensation payments, it is still important to keep an eye on them, so that your employer does not garnish them. Many experts recommend keeping the workers’ compensation payments separate from other sectors of your income so that you can more easily track the sum.

Consult an Attorney

If you believe your employer, or the employer of a loved one, wrongfully garnished your workers’ compensation payments, you need help from an expert who has extensive knowledge of California garnishment and workers’ compensation laws. The skilled and dedicated workers compensation attorneys at DiMarco | Araujo | Montevideo can give advice and representation to keep your employer from illegally garnishing your workers’ compensation. Request a free consultation today.