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Under 15 U.S.C. 1673(a)(1), involuntary withholding for the collection of a commercial debt is limited to a maximum of 25 percent of the employee's disposable earnings. However, state law prevails when it provides a maximum collection percentage less than 25 percent.
An employee's disposable earnings are pay subject to garnishment such as wages, salary, bonuses and incentive pay less authorized deductions. A complete list of the payments included in the definition of "disposable earnings" is found at 5 C.F.R. section 582.103. The regulation specifies the amounts that are excluded from the amount subject to garnishment. These include amounts owed to the United States, federal, state and local income tax withholding, Social Security withholding (FICA) and deductions for health insurance premiums.
If we are served with multiple garnishments, we will satisfy them on a first-come, first-served basis. We will “stack” the later-served garnishment in the pay system. Orders that have no expiration date will retain their priority. Orders that are time limited will lose their priority once they expire.
Orders for child support, alimony and related arrearages have priority over any commercial garnishment. If there are no disposable earnings available to comply with the court order due to a previously served order for child support or alimony, we will return the garnishment without action.
We are required to comply with bankruptcy court-ordered "automatic stays." When a civilian employee files for bankruptcy, the garnishment will be terminated.
In accordance with the regulation, we will assess an administrative fee of $75 against the employee to offset the cost of processing the garnishment. This fee covers the costs directly related to the processing of an order and will be deducted from the employee at the time the garnishment is started.
DoD civilian employees are paid on a bi-weekly basis; therefore, we will make payments bi-weekly. Variations in the pay cycle cannot be accommodated, and there is no requirement to do so under either the statute or the enabling regulation.
Furthermore, the pay system cannot escrow payments or institute a "withhold and do not remit" order. We will return such garnishments without action. The pay system also does not allow for pro-rated payments.
Updated: April 3, 2011