Garnishment

VIRGINIA DEPARTMENT OF LABOR AND INDUSTRY
DIVISION OF LABOR AND EMPLOYMENT LAW

FIELD OPERATIONS MANUAL

CHAPTER SEVEN GARNISHMENT

This document is part of the latest version of the Virginia Department of Labor and Industry
Division of Labor and Employment Law's Field Operations Manual. This document supersedes
any and all previous editions.

DISCLAIMER

The Field Operations Manual (FOM) is an operations manual that provides the Division of Labor
and Employment Law investigators and staff with interpretations of statutory provisions,
procedures for conducting investigations, and general administrative guidance. The FOM was
developed by the Labor and Employment Law Division under the general authority to administer
laws that the agency is charged with enforcing. The FOM reflects policies established through
changes in legislation, regulations, court decisions, and the decisions and opinions of the
Virginia Department of Labor and Industry. Further, the FOM is not used as a device for
establishing interpretative policy.

The Virginia Department of Labor and Industry (DOLI) is providing the information in this
manual as a public service. This information and other related materials are presented to provide
public access to information regarding DOLI programs. It is important to note that there will
often be a delay between the official publication of the materials and the modification of these
pages. Therefore, no express or implied guarantees are indicated. The Virginia Regulatory Town
Hall remains the official resource for regulatory information published by the DOLI. Every effort
will be made to address all errors brought to the attention of the Labor and Employment Law
Division staff.

A. Coverage

Homestead and Other Exemptions, commonly referred to as the garnishment statutes, are
contained in § 34-29 and § 34-33, Chapter 4, of the Code of Virginia. They apply to both private
and public employees and also include independent agents/subcontractors (§ 34-29(d)(1)).

B. DOLI'S Responsibility

The Homestead and Other Exemptions Law requires the State Commissioner of Labor and
Industry to prescribe by regulation the multiple of the federal minimum hourly wage equivalent
in effect to that prescribed by § 206(a)(1) of Title 29 of the United States Code in effect at the
time earnings are payable (§ 34-29(a)(2)). All other matters surrounding garnishments are to be
handled by the courts. DOLI does not accept garnishment complaints.

DOLI will continue, however, to answer questions concerning garnishment. This service is still
being offered, because there is no public forum, other than DOLI, that can assist employers.

C. Definitions

1. "Garnishment" means any legal or equitable procedure through which earnings of any
   individual are required to be withheld for the payment of any debt. Most garnishments are made
   by court order under which a creditor seeks to require an employer to withhold a portion of an
   employee's wages. The amount withheld is required to be paid directly to the court, which then
   disperses it to the creditor.
2. "Disposable earnings" means that part of an employee's earnings remaining after
   deductions from those earnings of any amount required by law to be withheld. The only amounts
   allowed to be deducted to determine disposable earnings for purposes of garnishment are the
   following:
   1. Federal income tax withholding deductions.
   2. Federal social security tax deductions.
   3. State and city withholding deductions.

Examples of deductions which are not allowed to be taken into account for the purpose of
determining "disposable earnings" are:
1. Deductions to purchase savings bonds.
2. Deductions for contributions to religious, charitable, or educational
organizations.
3. Deductions for union dues and union initiation fees.
4. Deductions for health and welfare premiums, including company
retirement programs.
5. Deductions for board, lodging, or other facilities furnished to an employee
by the employer.
6. Deductions for the purchase of stock in the employer's corporation.
7. Deductions pursuant to a voluntary assignment of wages by an employee.
8. Deductions to repay loans or payroll advances made to the employee by
the employer.
9. Deductions for merchandise purchased from the employer.
10. Wage assignments effected under federal or state law and executed by the
courts or governmental agencies.
11. Other levies or garnishments.
3. "Earnings" means compensation paid or payable for personal services whether called
wages, salary, commission, bonus, or otherwise, and includes periodic payments to a pension or
retirement program. The term "earnings" is given its widest scope under § 34-29. Dollar value
of meals and lodging furnished by an employer to employees is regarded as earnings for
purposes of garnishment. Tips are not usually regarded as earnings, because tips do not pass
through the hands of the employer. One rule that can usually be used to determine "earnings"
subject to garnishment is to determine whether the item of compensation is controlled by the
employer, that is to say, it passes through the employer's hands for distribution to the employee.

The term "earnings," however does not include the following items which are exempt under
federal and state law:
1. Social security benefits and supplemental security income (42 U.S.C. § 407).
2. Veterans benefits (38 U.S.C. § 3101).
3. Federal civil service retirement benefits (5 U.S.C. § 8346).
4. Annuities to survivors of federal judges (28 U.S.C. § 376(n)).
5. Longshoremen and Harborworkers Compensation Act (33 U.S.C. § 916).
6. Black lung benefits.

Exemptions listed under 1 through 6 above may not be applicable in child support and alimony
cases (42 U.S.C. § 659).
7. Seaman's, master's or fisherman's wages, except for child support or spousal support and
maintenance (46 U.S.C. § 1109).
8. Unemployment compensation benefits (§ 60.2-600, Code of Virginia). This exemption
may not be applicable in child support cases (§ 60.2-608, Code of Virginia).
9. Public assistance payments (§ 63.1-88, Code of Virginia).
10. Homestead exemption of $5,000 in cash (§ 34-4, Code of Virginia). This exemption may
not be available in certain cases, such as payment of rent or services of a laborer or
mechanic (§ 34-5, Code of Virginia).
11. Property of disabled veterans - additional $2,000 cash (§ 34-4.1, Code of Virginia).
12. Workers' Compensation benefits (§ 65.2-531, Code of Virginia).
13. Growing crops (§ 8.01-489, Code of Virginia).
14. Benefits from group life insurance policies (§ 38.2-3339, Code of Virginia).
15. Proceeds from industrial sick benefits insurance (§ 38.2-3549, Code of Virginia).
16. Assignments of salary and wages (§ 55-165, Code of Virginia).
17. Benefits for victims of crime (§ 19.2-368.12, Code of Virginia).
18. Preneed funeral trusts (§ 54.1-2823, Code of Virginia).
19. Certain retirement benefits (§ 34-34, Code of Virginia).
4. "One indebtedness" refers to a single debt regardless of the number of levies made or
proceedings brought for its collection.
5. "Subjected to garnishment" means actual withholding of the employee's wages for a
debt. Mere receipt by an employer of a garnishment order does not constitute "subjected to
garnishment." The employee is "subjected to garnishment" only when it is actually deducted
from his earnings.

B. Restrictions on garnishment amounts as prescribed in subsection (a) of Section 34-29

(numbered as "B" in the source document, following "B. DOLI'S Responsibility" and "C. Definitions" above)

1. The maximum part of an individual's total disposable earnings in any workweek which
   are subject to garnishment may not exceed the lesser of 1) 25 percent of the disposable earnings
   for that week or 2) the amount by which the disposable earnings for that week exceeds 40 times
   the federal minimum hourly wage prescribed by the Fair Labor Standards Act in effect at the
   time the earnings are payable (currently this is $7.25 an hour or $290.00 per week). The
   Commissioner of Labor and Industry prescribes the multiples in effect which would be
   applicable to pay periods longer than a week.

2. The maximum amounts of an employee's aggregate disposable earnings which may be
   garnished in a pay period for an ordinary debt are as follows:

   1. WEEKLY

   Disposable earnings of $290.00 (40 x "X" (federal hourly minimum) or less:
   NONE may be garnished.

   MAXIMUM 25%, after ensuring that the employee retains at least 40 x X (federal hourly
   minimum), which is currently $290.00.
   2. BI-WEEKLY

   $580.00 (40 x 2 weeks x "X" (federal hourly minimum) or less:

   NONE

   MAXIMUM 25%, after ensuring that the employee retains at least 40 x 2 weeks x X (federal
   hourly minimum), which is currently $580.00.
   3. SEMI-MONTHLY

   $628.33 (40 x 2.16665 weeks x "X" (federal hourly minimum)) or less:

   NONE

   AMOUNT ABOVE $628.33

   MAXIMUM 25%, after ensuring that the employee retains at least 40 x 2.16665 weeks x X
   (federal hourly minimum), which is currently $628.33.

   For purposes of this formula, a semi-month is considered 2.16665 weeks.
   4. MONTHLY

   $1,256.66 (40 x 4.3333 weeks x "X" (federal hourly minimum)) or less:

   NONE

   MAXIMUM 25%, after ensuring that the employee retains at least 40 x 4.3333 weeks x X
   (federal hourly minimum), which is currently $1,256.66.

   For purposes of this formula, a month is considered 4.3333 weeks.
   5. NO SET PAY PERIOD

   In the case of disposable earnings which compensate employees for personal services rendered in
   a pay period longer than 1 month, the weekly statutory exemption formula must be transformed
   to a formula applicable to such earnings providing equivalent restrictions on wage garnishment.
   For example, disposable earnings for 10 weeks is represented by the following formula:

   40 x 10 weeks x "X" (federal hourly minimum): NONE CAN BE GARNISHED

   More than 40 x 10 weeks x "X" (federal hourly minimum): ONLY THE AMOUNT ABOVE 40
   x 10 weeks x "X" (federal hourly minimum) CAN BE GARNISHED.

C. Maximum Amounts Which May Be Taken Under Child Support Orders and Other Legal Proceedings

(numbered as "C" in the source document — a second "C" heading, distinct from "C. Definitions" above)

1. The restrictions in subsection B do not apply to any order for the support of any person
   issued by a court of competent jurisdiction or in accordance with administrative procedure,
   which is established by state law, which affords substantial due process, and which is subject to
   judicial review. The restrictions for such support orders are:
   1. Fifty percent (50%) of the employee's disposable earnings may be taken under the
      support order if the employee is supporting another spouse or dependent other than the
      one for whom the support order is issued.
   2. Fifty-five percent (55%) of the employee's disposable earnings may be taken if the
      employee is supporting another spouse or dependent other than the one for whom the
      support order is issued, and the employee is 12 or more weeks in the arrears.
   3. Sixty percent (60%) of the employee's disposable earnings may be taken if the employee
      is not supporting another spouse or dependent other than the one for whom the support
      order is issued.
   4. Sixty-five percent (65%) of the employee's disposable earnings may be taken if the
      employee is not supporting another spouse or dependent other than the one for whom the
      support order is issued, and the employee is 12 or more weeks in the arrears.

Note: The support order will indicate whether 50, 55, 60, or 65 percent of the disposable
earnings should be withheld.
2. The garnishment exemptions do not apply to any order of any court of bankruptcy under
Chapter XIII of the Bankruptcy Act; therefore, 100% of disposable earnings could be withheld.
3. The garnishment exemptions do not apply to any debt due for any local, state, or federal
tax; therefore, 100% of the disposable earnings could be withheld.

Note: The restrictions for bankruptcy and tax debts are not provided for under § 34-29. These
amounts are determined by the applicable bankruptcy and tax laws. You should advise the
inquirer to contact the appropriate bankruptcy court or tax department for clarification of the
amount to be withheld.

D. Date wages paid or payable controlling

The date that disposable earnings are paid or
payable, and not the date the Court issues the garnishment order, is controlling in determining
the amount of disposable earnings that may be garnished. For example, when a withholding is
made after July 24, 2009, under a garnishment order issued by a court before July 24, 2009,
weekly disposable earnings in the amount of $290.00 or less would not be subject to
garnishment, even though the order was issued when the restriction protected the smaller amount
of $290.00.

E. Discharge for one indebtedness

Subsection (f) of § 34-29 prohibits an employer from discharging any employee because his
earnings have been subjected to garnishment for any one indebtedness. However, this section
does not prohibit discharge if the employee's earnings are subjected to garnishment for a second
debt. If an employee on being advised that garnishment is being considered, obtains a release
from the creditor before there is an actual withholding of earnings for a second debt, the earnings
have not been subjected to garnishment. The law does not expressly provide any time limitation
between a first and second indebtedness. Where considerable time such as a year has elapsed
between garnishments for one debt and garnishments for another debt, the first indebtedness may
no longer be a material consideration in the discharge. Determination in such cases is made on
the basis of all facts in the situation.

F.

The term garnishment is synonymous with wage assignment, tax lien, and bankruptcy
order. Regardless of the title of the legal instrument being used to direct the earnings of an
individual to a creditor, in no event may the amount of an individual's disposable earnings
exceed the amounts specified in subsections B and C of this section.

G.

Section 20-79.3 (8) relating to support orders states: "That the order shall have priority
over any other types of liens created by state law against such earnings, except that if there is
more than one court or administrative order for withholding for support against an obligor, the
employer must honor the terms of the earliest received order and subsequent orders shall be
honored in the order of receipt to the extent that the amounts withheld, when combined, do not
exceed the maximum limits imposed under § 34-29 as specified in the order being honored."

When there is more than one garnishment in effect, state and/or federal law require they be
handled in accordance with the following priority listing:

1. Support Order (Support Order takes priority over tax lien, provided the support order is
   made before the date of the tax levy.)
2. Tax Lien
3. Bankruptcy Order
4. Ordinary Debt

H. Case Examples

1. An employee's gross earnings in a particular week are $240.00; if, after deductions
   required by law, the disposable earnings are $210.00, the employee's earnings may not be
   garnished in any amount because the disposable earnings in a particular week are less than
   $290.00.
2. An employee's gross earnings in a particular workweek are $380.00; if, after deductions
   required by law, the disposable earnings are $330.00, only the amount over $290.00 may be
   garnished. For disposable earnings of $330.00, only $40.00 may be deducted for the
   garnishment in this week. The remaining $290.00 would be paid to the employee.
3. An employee's gross earnings in a particular workweek are $500.00; after deductions
   required by law, his disposable earnings are $400.00. In this week, 25 percent of the disposable
   earnings above $290.00, or 25 percent of $110.00, may be deducted for the garnishment.
   Twenty five percent of $110.00, or $27.50, may be deducted. The employee would receive
   $372.50.
4. A garnishment order is received on Wednesday requiring wages earned up to that day to
   be withheld. The employee is paid $70.00 a day. Since less than $290.00 has been earned, no
   garnishment is permitted. However, if another garnishment order is received when the workweek
   is completed, the employer should withhold on the basis of the earnings for the entire week.
5. An employee paid bi-weekly has disposable earnings of $500.00 for the first week and
   $200.00 for the second week of the pay period, or a total of $700.00. In a bi-weekly pay period
   when disposable earnings are above $580.00, 25 percent may be withheld for the garnishment. It
   does not matter that the disposable earnings in the second week are less than $290.00 - 25
   percent of the amount above $580.00, or $120.00, is subject to garnishment.
6. An employee on a $500 weekly draw against commissions has disposable earnings each
   week in the amount of $400. Commissions paid monthly total $4,000 for the month after
   deductions required by law. Each draw and the balance due at monthly settlement are separately
   subject to the law's restrictions. Thus, 25 percent of $400 or $100 may be deducted from each
   draw for the garnishment. At the end of the month, the $1,600 previously drawn is subtracted
   from the $4,000 settlement figure, and 25 percent of the balance ($2,400) or $800 may be
   withheld for garnishment.
7. An employee who has $150 disposable earnings (gross weekly less taxes) becomes
   subject to garnishment issued by the court directing the employer to withhold $60 for child
   support. The employee is not supporting another spouse or child other than the one represented
   in the court order nor is there any indication in the court order that the employee is 12 or more
   weeks in the arrears. Since the employer may withhold up to 60 percent of the employee's
   disposable earnings, the $60 may be legally withheld. However, no additional withholding may
   be made that week if another garnishment order resulting from an ordinary debt is subsequently
   received.
8. An employee who has $150 weekly disposable earnings becomes subject to garnishment
   directing his employer to withhold $80 for alimony. The employee has remarried and is
   supporting another dependent other than the one represented in the court order. The court order
   does not indicate the employee is 12 or more weeks in the arrears in alimony payments. Since in
   this instance the employer can only withhold 50 percent of the employee's disposable earnings,
   only $75.00 can be legally withheld.
9. An employee's gross earnings for a week are $400. Prior to receiving a garnishment, the
   employer has received a wage assignment from the Department of Social Services to deduct
   $102 a week or 50% of disposable earnings, whichever is less, for child support. Only taxes can
   be deducted from gross wages to determine disposable earnings for the purposes of garnishment.
   After the tax deductions, the employee has $340 disposable earnings. The $102 is deducted for
   the wage assignment ($102 is less than 50% of the disposable earnings figure of $340). If 25% or
   more of an individual's disposable earnings are being withheld for a support debt (in this
   example, 30% or $102 is being withheld), no additional amount may be withheld for an ordinary
   debt.
10. If 45% of an individual's disposable earnings are already being deducted for child
    support, and a state tax lien is received for 70% of the individual's disposable earnings, only
    55% of the disposable earnings can be applied to the tax lien. Support orders have priority over
    tax liens.
11. Assume an employer is withholding 25% for a garnishment on an ordinary debt. A
    support order is subsequently served on the employer for more than 25%. The support order has
    priority under Virginia law and should be honored. No additional amount can be deducted for the
    first garnishment.
12. Assume an employer is withholding 25% for a garnishment on an ordinary debt. The
    employer receives notice of the commencement of a bankruptcy case involving the employee.
    The employer must stop withholding wages pursuant to the garnishment. The wages withheld
    prior to the bankruptcy should be submitted to the court that issued the garnishment summons,
    with notice to the employee, the employee's bankruptcy attorney, the bankruptcy trustee and the
    judgment creditor.
13. Assume an employer is withholding 25% for a garnishment on an ordinary debt. The
    employer then receives a second garnishment for an ordinary debt. The employer must continue
    to honor the first garnishment even after the return date until it is paid in full, provided that the
    first judgment creditor renews the first garnishment without a lapse in a pay period.

I. Fees for Garnishment Summons

1. Employers may deduct a fee of up to $10.00 from a judgment-debtor employee for each
   garnishment summons it processes.
2. Employers may deduct a fee of $5.00 each and every time a deduction is made in
   accordance with a child support order.
3. Employers may deduct $20.00 for each tax lien processed.

J. Exemption of Wages of Minor from Garnishment

The wages of minors shall not be liable to garnishment or otherwise liable to the payment of the
debts of parents (§ 34-33).

K. Procedures

1. DOLI does not accept claims for excessive amounts being withheld for garnishment.
2. If it is determined that excessive amounts have been withheld from an employee's wages
   for garnishment, the Representative should do the following:
   1. Advise the employee to ask the employer to call the Representative for instructions so
      that a correction can be made in the amount being deducted.
   2. If the employer will not comply, instruct the employee to file the exemption claim form
      that comes with a garnishment summons, with the court.
   3. If Nos. (1) and (2) do not bring the employer into compliance, advise the employee that
      he or she will have to seek the assistance of an attorney, because DOLI does not have the
      authority to proceed further.
3. The Federal Garnishment Law (Consumer Credit Protection Act) is enforced by the
   Wage and Hour Division of the U.S. Department of Labor. In Virginia, an exemption for state
   regulated garnishment has been granted; therefore, the Virginia court system enforces the
   limitations on the amounts that may be garnished in a pay period, but not the restrictions on
   discharge from employment. Any inquiries surrounding alleged discharge for one indebtedness
   should be referred to the closest office of the Wage and Hour Division of the U.S. Department
   of Labor.
4. DOLI staff will continue to provide assistance to employers, employees, and other
   interested parties in the areas covered by this section while enforcement is left to the courts.