What is wage garnishment and how does it work?
Payroll deductions (as it is called in the law) is where your creditor has sued you and obtained a money judgment, which is a statement under the law that a certain sum money is owed by you to the creditor.
If you are employed and earn an hourly wage or salary, the creditor could get a court order requiring your employer to return a certain amount from each paycheck.
Once the judgment has been rendered by a court, if the creditor knows who your employer is, he sends a questionnaire (called an interrogation) to the employer to ask him for the amount of your salary.
The employer must respond to the creditor within the time limit imposed by law.
If the answers show that the employee earns enough to be deducted under the law, the creditor asks the judge to order the employer to return to the creditor the eligible amount of each paycheck until the judgment either paid in full, or the employee leaves the employment of the employer, or the judgment expires under the conditions imposed by law.
Under Illinois law, a deduction is the lesser of 1) 15% of the gross amount paid that week or 2) disposable income (earnings after deductions for taxes, insurance, retirement, etc.) that exceeds 45 times the federal minimum hourly wage. (or Illinois minimum wage, whichever is higher).
The employer should keep track of each pay period and calculate the amount of wages to see what amount, if any, is available for turnover.
If you have more than one debt on which creditors are using payroll deductions, only one deduction at a time can be in effect for the maximum allowable deduction, and they are in the priority that creditors obtained by filing the deduction.
Later creditors will have to queue with one exception: withholding orders for the payment of child or spousal support. These receivables have priority for deduction.
Other states may have different laws on the amount, if any, of wages that can be returned to creditors.
But if some creditors favor more than what is allowed under federal law for payroll deductions, the employee/debtor can use the federal payroll deduction amount.
It allows deductions for the lesser of 25% of disposable income or 30 times the federal minimum wage.
Illinois law is more employee/debtor friendly than the federal government, so it is applicable to anyone subject to Illinois payroll deduction law.
Illinois and federal law state that an employer cannot terminate an employee whose debt is collected by payroll deduction.
If there is more than one debt that creditors are trying to collect through payroll deductions, the employer can terminate the employee if they wish.
An employer who violates federal payroll deduction law in this regard faces federal criminal prosecution.
Federal courts have ruled that terminated employees cannot sue their employer for wrongful termination under the federal wage deduction law, only the Department of Labor can.
The best defense against a payroll deduction is not to be employed.
Unemployment has its perks, other than living in a homeless shelter or in a cardboard box on the street.
Brett Kepley is an attorney with Land of Lincoln Legal Aid Inc. Send your questions to The Law Q&A, 302 N. First St., Champaign, IL 61820.
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