What are the general procedures for processing wage deductions (garnishments or assignments)?

Employers should follow the procedures below each time they process a wage deduction order.

• Read the order as soon as it is received.
• Provide the employee with a copy of the wage deduction order. (Note that the employer may not be legally required to do so.)
• Determine the purpose of the wage deduction order --i.e., is it a tax levy, child support order, etc.?
• Determine what portion of the employee's wages may be exempt from the order.
• Determine in what priority multiple orders (if any) against the same employee must be satisfied.
• Answer the wage deduction order as stated on the face of the order or as required by state law.
• Withhold from the employee's wages the amount required by the order. Begin to withhold based upon the order, even if the employee is currently challenging the legitimacy and/or amount of the order.

One indebtedness rule. Under federal law, an employer may not discharge an employee due to an involuntary wage deduction order or garnishment for any "one indebtedness." Employers that violate the one indebtedness rule are subject to a fine of up to $1,000 or up to one year of imprisonment. This rule applies to several types of wage deductions, including:

• Tax levies;
• Support orders;
• Garnishments;
• First-time garnishment orders under Chapter 13 of the Bankruptcy Code; and
• Wage assignments that have been subsequently enforced with a court-ordered garnishment.

The following examples illustrate the ways the "one indebtedness" rule typically applies.