California law limits the amount that a creditor can garnish (take) from your wages for repayment of debts. California’s wage garnishment limits are similar to those found in federal wage garnishment laws (also called wage attachments). For most debtors, creditors cannot garnish more than 25% of their wages after deductions. If your wages are low, however, California law protects even more of them (and even more than does federal law).
What Is a Wage Garnishment?
A wage garnishment or wage attachment is an order from a court or a government agency that is sent to your employer. It requires your employer to withhold a certain amount of money from your paycheck and then send this money directly to your creditor.
Different garnishment rules apply to different types of debt — and there are legal limits on how much of your paycheck can be garnished.
When Can a Creditor Garnish Your Wages in California?
Most creditors cannot get a wage garnishment order until they have first obtained a court judgment stating that you owe the creditor money. For example, if you are behind on credit card payments or owe a doctor’s bill, those creditors cannot garnish your wages (unless they sue you and get a judgment).
However, there are a few exceptions to this rule. Your wages can be garnished without a court judgment for:
- unpaid income taxes
- court ordered child support
- child support arrears, and
- defaulted student loans.
Limits on Wage Garnishment in California
There are limits to how much money can be garnished from your paycheck. The idea is that you should have enough left to pay for living expenses.
Federal law places limits on wage garnishment amounts. While states are free to impose stricter limits, California has not done so. That means the federal law governs in California. Here are the rules:
For any given workweek, creditors are allowed to garnish the lesser of:
- 25% of your disposable earnings, or
- the amount by which your weekly disposable earnings exceed 40 times the state hourly minimum wage (which is currently $8.00 per hour, but may increase in 2014).
“Disposable earnings” are those wages left after your employer has made deductions required by law.
Example. Let’s assume you earn $1,000 per week and your net wages (disposable earnings) are $700 after all required deductions. The current state hourly minimum wage is $8.00, multiplying it by 40 gives us $320. This means that your wages can be garnished up to $175 ($700 times 25%) or $380 ($700 minus $320) per week, whichever is less. As a result, your wages may be garnished up to $175 per week.
Comparison to Federal Wage Garnishment Limits
Under federal law, creditors may garnish the lesser of:
- 25% of your disposable earnings, or
- the amount by which your weekly disposable earnings exceed 30 times the federal hourly minimum wage.
If your income is close to the minimum wage, California law provides more protection for your wages. This is because the federal minimum wage is lower than that in California (federal minimum wage is currently $7.25 as opposed to California’s $8.00 per hour) and the mulitplier in federal law is 30, not 40.
Example 1. Let’s say you earn $8 per hour and work 40 hours per week, so that your weekly wage is $320. After deductions, your weekly income is $310. Under federal law, the creditor can garnish the lessor of
- $77.50 (25% of $310), or
- $92.50 ($380 – (30 x $7.25)).
The creditor could garnish no more than $77.50.
Example 2. In the same example, under California law, the creditor can garnish the lessor of
- $77.50 (25% of $310), or
- $0 (because $310 – (40 x $8.00) = -$10).
This means that in California, the creditor cannot garnish any of your wages in this situation.
Special Limits for Child Support, Student Loans, and Unpaid Taxes
If you owe child support, student loans, or taxes, the government or creditor can garnish your wages without getting a court judgment. The amount that can be garnished is different too.
Child Support
Since 1988, all court orders for child support include an automatic income withholding order. The other parent can also get a wage garnishment order from the court if you get behind in child support payments.
Federal law limits what can be taken from your paycheck for this type of wage garnishment. Up to 50% of your disposable earnings may be garnished to pay child support if you are currently supporting a spouse or a child who isn’t the subject of the order. If you aren’t supporting a spouse or child, up to 60% of your earnings may be taken. An additional five percent may be garnished for support payments over 12 weeks in arrears.
Student Loans in Default
If you are in default on a federal student loan, the U.S. Department of Education or any entity collecting for this agency can garnish your wages without first getting a court judgment – this is called an administrative garnishment. The most that the Department of Education can garnish is 15% of your disposable income, but not more than 30 times the minimum wage.
Unpaid Taxes
The federal government can garnish your wages if you owe back taxes, even without a court judgment. The amount it can garnish depends on how many dependents you have and your deduction rate.
States and local governments may also be able to garnish your wages to collect unpaid state and local taxes. Contact your state labor department to find out more.
If you owe California state taxes, up to 25% of your net wages may be garnished by the state to satisfy your tax obligations.
Total Amount of Garnishment
If you have more than one garnishment, the total amount that can be garnished is limited to 25%. For example, if the federal government is garnishing 15% of your income to repay defaulted student loans and your employer receives a second wage garnishment order, the employer can only take another 10% of your income to send to the second creditor.
Restrictions on Job Termination Due to Wage Garnishments
Complying with wage garnishment orders can be a hassle for your employer; some might be inclined to terminate your employment rather than comply with the order. State and federal law provides some protection for you in this situation.
According to federal law, your employer cannot discharge you if you have one wage garnishment. However, federal law won’t protect you if you have more than one wage garnishment order.
