Wage garnishments can be complex and time consuming for employers to manage on their own, especially when best practice guidelines are constantly changing. To help support businesses in their compliance efforts, we compiled some of the latest trends and legislative updates that may affect garnishments.

Electronic payments are growing

  • 18 child support agencies, plus Guam, have mandated electronic payments for child support wage garnishment.
  • Electronic income withholding (e-IWO) is gaining in acceptance, processing 9 million orders to date and growing at 2 million per year.
  • Department of Revenue agencies are exploring electronic tax levy processing as an option.

COVID-19 relief for student loans

  • In response to the COVID-19 Pandemic, the CARES Act extended relief to student loan borrowers until Sept 30, 2020.
  • The Memorandum on Continued Student Loan Payment Relief During the COVID-19 Pandemic provided an extension of the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.
  • Additional legislation is anticipated to further address student loans during the COVID-19 pandemic.

New guidelines on bonus and lump sum payments

In a 2018 opinion letter, the Department of Labor indicated that 15 of the 18 types of lump sum payments subject to garnishments are protected by the Consumer Credit Protection Act (CCPA). The exceptions include workers’ compensation, insurance settlements and buybacks of company shares.

ADP Editorial Team

ADP Editorial Team The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.