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John, Employment Lawyer
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Experience:  Exclusively practice labor and employment law.
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I have an associate who has an IWO for child support. I am

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I have an associate who has an IWO for child support. I am supposed to withhold 88.96 a week. He has an elective Aflac coverage for 9.21 a week. I received another IWO for Medical Benefits for his child. His gross income is 400.00 per week. Adding Medical would be 99.55 weekly and Dental would be 14.99 weekly. Making his check amount 187.29 before taxes. Do I have to do this? Isn't there some sort of threshold in the amount we withheld. He will be lucky to bring home $120.00 a week. How can a person live? What am I obligated to do? I know there is a 50% threshold but where does that come in to play? Any feedback would help! Thank you!
Submitted: 1 year ago.
Category: Employment Law
Expert:  John replied 1 year ago.

EmplmntLaw1 :

Hi, thanks for submitting your question today.

EmplmntLaw1 :



The Consumer Protection Credit Act, which is a federal law, protects employees by limiting the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage. This limit applies regardless of how many garnishment orders an employer receives. The federal minimum wage is $7.25 per hour effective July 24, 2009.


The Act permits a greater amount of an employee’s wages to be garnished for child support, bankruptcy, or federal or state tax payments. The Act allows up to 50 percent of an employee's disposable earnings to be garnished for child support if the employee is supporting a current spouse or child, who is not the subject of the support order, and up to 60 percent if the employee is not doing so. An additional five percent may be garnished for support payments over 12 weeks in arrears.


An employee’s "disposable earnings" is the amount of earnings left after legally required deductions (e.g., federal, state and local taxes; Social Security; unemployment insurance; and state employee retirement systems) have been made. Deductions not required by law (e.g., union dues, health and life insurance, and charitable contributions) are not subtracted from gross earnings when the amount of disposable earnings for garnishment purposes is calculated.


 

EmplmntLaw1 :

Thus in this situation it appears you'd be legally required to take up to 50% per paycheck (or more if he was over 12 weeks in arrears); the gross being the amount after taxes - not health and other deductions. The way you'd do the calculation then is as follows $400 gross, less tax withholdings, then take up to 50% of that amount for the garnishment, then subtract the health and other benefits

EmplmntLaw1 :



I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – select the Reply to Expert or Continue Conversation button. If you are otherwise satisfied with my response, please leave a positive rating as it is the only way I am able to get credit for my answers. Thank you, XXXXX XXXXX wish you all the best with this matter.

Expert:  John replied 1 year ago.
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Expert:  John replied 1 year ago.

Hi, thanks for submitting your question today.


The Consumer Protection Credit Act, which is a federal law, protects employees by limiting the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage. This limit applies regardless of how many garnishment orders an employer receives. The federal minimum wage is $7.25 per hour effective July 24, 2009.

The Act permits a greater amount of an employee’s wages to be garnished for child support, bankruptcy, or federal or state tax payments. The Act allows up to 50 percent of an employee's disposable earnings to be garnished for child support if the employee is supporting a current spouse or child, who is not the subject of the support order, and up to 60 percent if the employee is not doing so. An additional five percent may be garnished for support payments over 12 weeks in arrears.

An employee’s "disposable earnings" is the amount of earnings left after legally required deductions (e.g., federal, state and local taxes; Social Security; unemployment insurance; and state employee retirement systems) have been made. Deductions not required by law (e.g., union dues, health and life insurance, and charitable contributions) are not subtracted from gross earnings when the amount of disposable earnings for garnishment purposes is calculated.

 

Thus in this situation it appears you'd be legally required to take up to 50% per paycheck (or more if he was over 12 weeks in arrears); the gross being the amount after taxes - not health and other deductions. The way you'd do the calculation then is as follows $400 gross, less tax withholdings, then take up to 50% of that amount for the garnishment, then subtract the health and other benefits


I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – select the Reply to Expert or Continue Conversation button. If you are otherwise satisfied with my response, please leave a positive rating as it is the only way I am able to get credit for my answers. Thank you, XXXXX XXXXX wish you all the best with this matter.

Customer: replied 1 year ago.

If I take, 400.00, minus taxes 50.00 that is 350.00. 50% of that is 175.00, his child support is 88.96, insurance would be 114.54, therefore, I wouldn't be able to deduct the Health Insurance, so does that mean, I am unable to withhold? I just want to make sure I am following all the guidelines...

Expert:  John replied 1 year ago.
With the numbers you've provided, you would have to garnish the entire $88.96. My figures show he'd still have $261.04 from which to deduct health insurance etc. But if he otherwise didn't have enough for voluntary deductions (i.e., healthcare, dental etc) then he'd have to give those up. The botXXXXX XXXXXne here is that 50% of his gross ($350/2= $175) is greater than $88.96 - so legally you have to withhold that for child support or face having your company owe it if it is discovered that you did not.

Hope this helps
Customer: replied 1 year ago.


But, I also have an IWO for medical benefits that is stating I am required to withhold. The health deductions total 114.54. I am not questioning the Child Support IWO, I am questioning the second one. Make sense?

Expert:  John replied 1 year ago.
Sorry, I thought you only had the one IWO. The max you can legally garnish is $175 by your numbers, and withholding for healthcare would exceed that.

According to Missouri law, a concurrent withholding for health insurance benefits would be denied in full if it causes the the total withholding to exceed the amount of the 50% amount of the Consumer Protection Act; so by this law the health care withholding would not be paid at all. See the following:

454.636. 1. An order of income withholding for health benefit plan coverage shall have priority over all other legal processes under state law against money, income or periodic earnings of the noncustodial parent except an order of income withholding for current child support.

2. Notwithstanding the provisions of section 452.350 and section 454.505, or any other provision of law to the contrary, the amount contained in an order of income withholding for health benefit plan coverage issued pursuant to sections 454.600 to 454.645, shall be considered a current child support obligation for purposes of applying the limitations contained in the federal Consumer Credit Protection Act, 15 U.S.C. 1673(b), and shall run concurrently with orders issued pursuant to section 452.350 and section 454.505. However, when concurrently running wage withholding processes for the collection of support obligations, including an order for health benefit plan coverage, cause the amounts withheld from the obligor to exceed applicable wage withholding limitations, the employer shall not include the amount contained in the order of income withholding for health benefit plan coverage in determining the pro rata distribution, and shall not withhold any amount for health benefit plan coverage from an employee's wages.

John, Employment Lawyer
Category: Employment Law
Satisfied Customers: 2976
Experience: Exclusively practice labor and employment law.
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Customer: replied 1 year ago.

PERFECT!! That is what I needed! THANK YOU!!

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