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Ray
Ray, Employment lawyer
Category: Employment Law
Satisfied Customers: 42874
Experience:  30 years in Employment law
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I need help employer to figure the correct garnishment from

Customer Question

I need help for my employer to figure the correct garnishment from my check it states: 25% of defendants disposable earning (if $290.00 or higher) for each workweek, or The amount by which the defendants disposable earnings for that week exceed 30 time
the current federal minimum hourly wage or the equivalent multiples thereof if the pay period is other than one week (weekly exempt amount is currently $217.50.
Submitted: 1 year ago.
Category: Employment Law
Customer: replied 1 year ago.
for instance my check this week is supposed to be 345.00
Customer: replied 1 year ago.
btw I am an independent contractor and get paid with a 1099 form at the year end. I have to pay taxes on my own
Expert:  Ray replied 1 year ago.

Ind. Code § 24-4.5-5-105 : Indiana Code - Section 24-4.5-5-105: Limitation on garnishment and proceedings supplemental to execution; employer's fees

(1) For the purposes of IC 24-4.5-5-101 through IC 24-4.5-5-108:
(a) "disposable earnings" means that part of the earnings of an individual, including wages, commissions, income, rents, or profits remaining after the deduction from those earnings of amounts required by law to be withheld;
(b) "garnishment" means any legal or equitable proceedings through which the earnings of an individual are required to be withheld by a garnishee, by the individual debtor, or by any other person for the payment of a judgment; and
(c) "support withholding" means that part of the earnings that are withheld from an individual for child support in accordance with the laws of this state.
(2) Except as provided in subsection (8), the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment to enforce the payment of one (1) or more judgments against him may not exceed:
(a) twenty-five percent (25%) of his disposable earnings for that week; or
(b) the amount by which his disposable earnings for that week exceed thirty (30) times the federal minimum hourly wage prescribed by 29 U.S.C. 206(a)(1) in effect at the time the earnings are payable;
whichever is less. In the case of earnings for a pay period other than a week, the earnings shall be computed upon a multiple of the federal minimum hourly wage equivalent to thirty (30) times the federal minimum hourly wage as prescribed in this section.
(3) The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment or support withholding to enforce any order for the support of any

person shall not exceed:
(a) where such individual is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used), fifty percent (50%) of such individual's disposable earnings for that week; and
(b) where such individual is not supporting such a spouse or dependent child described in subdivision (a), sixty percent (60%) of such individual's disposable earnings for that week;
except that, with respect to the disposable earnings of any individual for any workweek, the fifty percent (50%) specified in subdivision (a) shall be deemed to be fifty-five percent (55%) and the sixty percent (60%) specified in subdivision (b) shall be deemed to be sixty-five percent (65%), if and to the extent that such earnings are subject to garnishment or support withholding to enforce a support order with respect to a period which is prior to the twelve (12) week period which ends with the beginning of such workweek.
(4) No court may make, execute, or enforce an order or process in violation of this section.
(5) An employer who is required to make deductions from an individual's disposable earnings pursuant to a garnishment order or series of orders arising out of the same judgment debt (excluding a judgment for payment of child support) may collect, as a fee to compensate the employer for making these deductions, an amount equal to the greater of twelve dollars ($12) or three percent (3%) of the total amount required to be deducted by the garnishment order or series of orders arising out of the same judgment debt. If the employer chooses to impose a fee, the fee shall be allocated as follows:
(a) One-half (1/2) of the fee shall be borne by the debtor, and that amount may be deducted by the employer directly from the employee's disposable earnings.
(b) One-half (1/2) of the fee shall be borne by the creditor, and that amount may be retained by the employer from the amount otherwise due the creditor.
The deductions made under this subsection for a collection fee do not increase the amount of the judgment debt for which the fee is collected for the purpose of calculating or collecting judgment interest. This fee may be collected by an employer only once for each garnishment order or series of orders arising out of the same judgment debt. The employer may collect the entire fee from one (1) or more of the initial deductions from the employee's disposable earnings. Alternatively, the employer may collect the fee ratably over the number of pay periods during which deductions from the employee's disposable earnings are required.
(6) The deduction of the garnishment collection fee under subsection (5)(a) or subsection (7) is not an assignment of wages under IC 22-2-6.
(7) An employer who is required to make a deduction from an individual's disposable earnings in accordance with a judgment for payment of child support may collect a fee of two dollars ($2) each

time the employer is required to make the deduction. The fee may be deducted by the employer from the individual's disposable earnings each time the employer makes the deduction for support. If the employer elects to deduct such a fee, the amount to be deducted for the payment of support must be reduced accordingly if necessary to avoid exceeding the maximum amount permitted to be deducted under subsection (3).
(8) A support withholding order takes priority over a garnishment order irrespective of their dates of entry or activation. If a person is subject to a support withholding order and a garnishment order, the garnishment order shall be honored only to the extent that disposable earnings withheld under the support withholding order do not exceed the maximum amount subject to garnishment as computed under subsection (2).

If you are a 1099 contractor here the creditor cannot do wage withholding.You would advise the court where the garnishment is issued that you are not are employee subject to garnishment but rather a self employed individual.As you can see the garnishment laws only apply to wages, here they cannot force a 1099 employer to garnish wages here.

If necessary you may need a local lawyer to take this back to court if they try to take 1099 funds from you here.This is to your advantage to contest this as you are not a regular traditional employee and the laws do not apply to you in this situation as independent contractor.No need to calculate this it does not apply to you.

Expert:  Ray replied 1 year ago.

I need to supplement here.There was a recent Supreme Court case which allowed garnishment against 1099 earnings and allows them to now do that.

Here is the case..

If as a secured lender you choose to pursue a deficiency judgment, one of the common options to consider is a garnishment proceeding. Typically, we think of this in terms of garnishing “wages,” but the May 31, 2007 opinion by the Indiana Court of Appeals in Indiana Surgical Specialists v. Griffin, 2007 Ind. App. LEXIS 1151 explained that garnishment can include more than just wages. (ISSvGriffinOpinion.pdf)

Indiana Surgical involved a judgment debtor that was an independent contractor of the garnishee defendant. In other words, the debtor was not an employee and did not earn wages. She was a courier who received a commission based on the deliveries made. The Indiana Court of Appeals determined that the commissions were “periodic payments of compensation,” which constituted “earnings” subject to garnishment. Id.

Expert:  Ray replied 1 year ago.

Here this is going to be different, the court may have to calculate your net income after you pay your self employment taxes.It would likely be your gross minus 15.3 % which is the self employment rate.For self-employment income earned in 2013 and 2014, the self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance)

Expert:  Ray replied 1 year ago.

This is also the rate for 2015 it has not changed.

Expert:  Ray replied 1 year ago.

345 -52.78= $292.28 is your net income here.Thats 15.3% off your gross..

Expert:  Ray replied 1 year ago.

They can take 25% =$73.07

You take your net here say $292.28 and they can take .25%.

I hope that clarifies the matter for you.Thanks.