New York State law limits the amount that a creditor can garnish from your wages to repay debts. New York State wage garnishment laws, commonly called "income executions" in New York, provide borrowers with slightly more protection than federal law, allowing judgment creditors—those creditors who have sued and received a money judgment—to take up to 10% of your gross wages. In some cases, depending on the debt type, creditors can take more without first needing to file and win a lawsuit.
An "income execution" is an order from a court or a government agency that requires your employer to withhold a certain amount of money from your paycheck for the benefit of your creditor. The creditor can't take your entire check, though. Legal limits dictate how much of your paycheck a creditor can garnish, depending on the type of debt.
Creditors with the following types of debt can garnish your wages without doing more:
However, most creditors can't get an income execution order until they first get a court judgment stating that you owe the creditor money. For example, if you're behind on credit card payments or owe a doctor's bill, the creditor would need first to file a lawsuit, win in court, and receive a money judgment against you before garnishing your wages.
Federal law places limits on income execution amounts that can be garnished from your paycheck. The idea is that you should have enough left to pay for living expenses. New York State expands the federal limits slightly, offering a bit more protection to wage earners. Here are the rules:
In New York State, a creditor can garnish the lesser of 10% of your gross wages or 25% of your disposable income to the extent that this amount exceeds 30% of minimum wage. If your disposable income is less than 30 times the minimum wage, it can't be garnished at all. (N.Y.C.L.P.R. § 5231).
"Disposable earnings" are those wages left after your employer has made deductions required by law. (N.Y.C.L.P.R. § 5231). Examples of legally required deductions are federal, state and local taxes, Social Security and the employee portion of state unemployment compensation insurance. Deductions that are not required by law don't count to reduce your disposable income.
If you owe child support, student loans, or taxes, the government or creditor can garnish your wages without getting a court judgment—and the maximum garnishment amount is different too.
Since 1988, all court orders for child support include an automatic income withholding order. The other parent can also get a wage garnishment order from the court if you get behind in child support payments.
Federal law limits the garnishment to up to 50% of your disposable earnings if you are currently supporting a spouse or a child who isn't the subject of the order. If you aren't supporting a spouse or child, up to 60% of your earnings may be taken. An additional five percent can be garnished for support payments over 12 weeks in arrears. (15 U.S.C. § 1673).
If you're in default on a federal student loan, the U.S. Department of Education or any entity collecting for this agency can garnish your wages without first getting a court judgment using an administrative garnishment. The most that the Department of Education can garnish is 15% of your disposable income, but not more than 30 times the minimum wage. (20 U.S.C. § 1095a(a)(1), 15 U.S.C. § 1673).
The federal government can garnish your wages without a court judgment if you owe back taxes. The amount will depend on how many dependents you have and your deduction rate. (26 U.S.C. § 6334(d)).
States and local governments can also garnish your wages to collect unpaid state and local taxes. Contact your state labor department to find out more.
Under federal law, if you have more than one garnishment, the total amount that can be garnished is limited to 10% of your gross wages or 25% of your disposable wages, whichever is less. (15 U.S.C. § 1673). For example, if the federal government is garnishing 15% of your disposable income to repay defaulted student loans and your employer receives a second wage garnishment order, the employer can only take another 10% of your disposable income to send to the second creditor.
Complying with wage garnishment orders can be a hassle for your employer, and some might be inclined to terminate your employment. State and federal law provide some protection for you in this situation.
Under federal law, your employer can't discharge you if you have one wage garnishment. (15 U.S.C. § 1674). But federal law won't protect you if you have more than one wage garnishment order. Check with a local attorney to find out more about state protections. In New York State, your employer can't fire you, refuse to promote you, or take negative action against you solely because of an income execution. (N.Y.C.L.P.R. § 5252).
You'll find additional information on the website of the New York State Department of Labor.
For information specific to your situation, or to get help objecting to a garnishment, contact a local debt relief attorney.