Wage Garnishment
- Frequently Asked Questions
Q. If someone else is already garnishing my employee’s disposable pay, do I still have to comply with the AWG Order?
A. Yes, but the amount you must withhold may be reduced. The law (15 USC § 1673)
imposes a maximum on how much can be garnished at any one time; currently,
that maximum is 25% of the employee’s disposable pay. So if the current
garnishment is taking, for example, 20%, the AWG
Order (assuming it is next in line) is still operable to the extent of the
remaining 5% of the employee’s disposable pay. On the other hand, if
the prior garnishment(s) account for 25%, then nothing would have to be withheld
on the AWG Order, at least until the prior garnishment(s) were satisfied or
expired.
Remember: that same Federal law also protects from garnishment a “floor” level of income equal to 30 times the minimum wage per week.
Remember: some garnishments expire (AWG Orders do not) even before the full amount has been paid, and once a prior garnishment expires (or is satisfied) the next in line garnishment usually takes over.
Q. The AWG Order is not signed; do I have to honor it?
A. Yes. The law (20 USC § 1095a) does not require that the Order must be signed to be valid and legally binding. However, if you have any question about the Order’s authenticity, please contact the Legal Division of the Oklahoma Guaranteed Student Loan Program, PO Box 3000, Oklahoma City OK 73101-3000; 1-800-777-3394.
Q. I am told that my state law forbids wage garnishment, so can’t I just
ignore the AWG Order?
A. No. AWG is authorized by a Federal law (20 USC § 1095a), which specifically preempts State law.
Q. What are the consequences if I fail to comply?
A. A non-compliant employer will be liable for, and subject to suit by the Oklahoma Guaranteed Student Loan Program to recover, any amount that the employer fails to withhold after receipt of notice of the AWG Order, plus attorneys’ fees, costs, and, in the court’s discretion, punitive damages.
Q. Can I impose a fee for administering this? If I can, who pays?
A. The Statute and Regulations authorizing Administrative Wage Garnishments do not provide for an employer processing fee. This is an issue that you should discuss with your legal advisor.
Q. (IF APPLICABLE) The Order directs that I send the payments to someone other
than the Oklahoma Guaranteed Student Loan Program.
Is that ok?
A. Yes. Guaranty agencies, such as the Oklahoma Guaranteed Student Loan Program, are permitted to retain others to aid in the administration of the AWG process, including the collection of payments under an Order.
Q. My employee does not earn enough to garnish because he or she is part-time or works on an as needed basis, what should I do?
A. Notify OGSLP in writing that the debtor does not earn enough to withhold.
Q. My employee filed for protection under bankruptcy, what should I do?
A. Notify OGSLP in writing, please include a copy of the 341 Meeting Notice or provide the case number, district, date of filing and the state where the action was filed. While we must cease our collection efforts during an active bankruptcy, please be advised that student loans are non-dischargeable in most cases.
Q. My employee says “I paid this debt/don’t owe this debt/made arrangements, etc. Can I stop withholding or disregard the order?"
A. No. You must comply with the order until/unless you receive a written Release of Withholding. Federal law [(20 USC 1095a(a)(6)] makes you liable for any amount that you should, but do not, withhold following receipt of the Order. The Oklahoma Guaranteed Student Loan Program may sue you in State or Federal court to recover those sums, together with attorney’s fees, costs and, in the court’s discretion, punitive damages.
Q. I received a balance letter what should I do?
A. Update your records. Balance letters will be sent to you periodically to keep you informed of the current outstanding balance. Reminder: Interest accrues daily.
Q. I have reached the original balance on the order can I stop the withholding?
A. No. Instead, contact OGSLP. The amount on the order is the balance as of the day the order was prepared and mailed from our office. The order does not contain any un-matured interest. Interest accrues daily.
Q. My employee receives a bonus/commission check, do I have to withhold from
these amounts in addition to the regular 10% net deduction?
A. Yes. You must withhold ten percent from all monies paid to the employee (some restrictions apply ie..workmens comp, disability, etc).
Q. Does my employee have to consent to the order or sign any of the paperwork
sent to me?
A. No. The information and forms sent to you are for your use only. There is nothing in the packet that requires the employee’s signature.
Q. Has my employee been notified prior to this action?
A. Yes. We send a notice to the employee encouraging them to enter into a voluntary repayment agreement before a garnishment is issued.
Q. My employee can’t afford this garnishment, what should he or she do?
What should I do?
A. The employee may contact OGSLP to discuss any available options including a Wage Withholding Reduction Request (WWRR). You must start and continue the withholding unless you are notified in writing to reduce the amount or cease withholding.
Q. My employee is actually an independent contractor and I do not withhold taxes or any other amounts from his or her pay, what should I do?
A. Notify OGSLP in writing that your employee is self-employed.