Wage garnishments, which are governed by state and federal laws, are generally created and enforced by court order, and require an employer to withhold a portion of an employee's earnings for payment of a debt.

Garnishments are governed by state laws and Title III of the Consumer Credit Protection Act, which is administered by the Wage and Hour Division of the U.S. Department of Labor's Employment Standards Administration. The law limits the amount of earnings that an employer can garnish from an employee's wages—usually up to 25 percent. It also prevents an employer from firing an employee if his or her paycheck is garnished for only one debt. The federal bankruptcy code prohibits garnishing an employee's wages once that employee has filed for bankruptcy, and Title III also does not place restrictions on garnishments for back state or federal taxes. An employer who violates Title III may have to reinstate a discharged employee, pay back wages, and return money garnished from an employee's earnings. Willful violation on the part of an employer can result in steep fines and criminal charges.

The amount that is garnished from an employee's paycheck depends on the type of debt. For example, Title III allows an employer to garnish up to 50 percent of an employee's earnings for child support for a current child or spouse, up to 60 percent if the employee is not providing support, and an additional 5 percent for support payments more than 12 weeks in arrears. To read more about the law, visit the U.S. Department of Labor online at www.dol.gov.