Q. Does Oregon law require an employer to respond to a garnishment of wages received from an employee’s creditor?
A. Yes. When a creditor or “garnishor” issues a proper writ of garnishment and delivers the document to the employer or anyone “apparently in charge” of the office, the employer, also known as the “garnishee” must prepare a response within seven calendar days. If the seventh day falls on a Saturday, Sunday or legal holiday, the deadline is extended to the next day. The garnishee need not respond if the writ is not delivered within 60 days of its date of issuance, if the required items are not delivered with the writ (response form, instructions, and wage exemption calculation form), or if the garnishment has been released or if any other law or court order directs that no response be made. Even if a response is not required, the garnishee may wish to send a letter to the court administrator and/or the garnishor explaining the basis for not responding, in order to avoid being ordered to appear in person and explain the failure or refusal to respond.
The employer must process the garnishment, first examining the writ to determine if it is properly issued, then completing the wage exemption calculation form provided. The writ must have been issued by a court administrator, a licensed Oregon attorney or a child support administrator with the Department of Justice or the District Attorney’s office.
The employer is required to withhold wages of the employee, or “debtor”, for a period of 90 days from receipt of the writ, unless earlier satisfied or released, and must pay the withheld amounts to the garnishor every time wages are paid to the employee, with the final payment made when the garnishee next pays wages to the employee after the writ expires. ORS 18.735. If the garnishee fails to deliver payment, underreports property of the employee held by the garnishee or fails to respond to the writ, the employer may be liable to the garnishor for the amounts that were required to be withheld plus the creditor’s costs. ORS 18.775.
Q. Does the law set a limit on the amount of wages subject to garnishment?
A. Yes. The maximum is generally 25% of the employee’s disposable earnings (net after taxes), so long as the employee is left with at least $218 per week after the garnishment - see ORS 18.385 and 29 CFR § 870.10 regarding other pay period intervals and additional requirements.
Garnishments are subject to the priority of orders of a bankruptcy court or for items like child support, and taxes - the limits listed above are applied only after the employer withholds the ordered support, to the extent there are wages left to satisfy the garnishment beyond those limits. Child support withholdings are calculated by the court ordering the support according to the provisions of ORS 25.414.
Q. What do we do if we receive multiple garnishments for the same employee? Which garnishment takes precedence?
A. ORS 18.627 requires employers to respond to garnishments in the order received, or “first in time, first in right”. If the first writ does not garnish all available non-exempt wages, then the employer must process the second writ (and then the third, etc.) concurrently to capture any remaining wages up to the prescribed limit.
In addition to child support orders, state and federal tax levies may also take priority over other garnishments. Employers are urged to consult with counsel in determining the priority of child support orders and tax liens.
Q. Can an employer fire an employee because his or her wages are garnished?
A. No. It is an unlawful employment practice to terminate an employee because of a garnishment or a support order. ORS 18.385(9); ORS 25.424(6)(a).
Q. Can an employer charge the employee for the bookkeeping required in administering garnishments?
A. Yes. ORS 18.736 authorizes employers to charge a processing fee of $2 for each week or portion thereof during which garnishment payments were made to the garnishor. The fee may not be charged to the employee until after the last garnishment is made, and may not be charged if to do so would take the employee below the garnishment limits of ORS 18.385.
Q. Where can an employer turn for help in responding to a garnishment?
A. Because of the complexities involved in processing garnishments and the potential for garnishee liability, employers may choose to enlist the help of a professional payroll service or contact an employment attorney who is knowledgeable in the area of garnishments.
For assistance in responding to wage withholding orders for family support, contact the Child Support Division at the Oregon Department of Justice.
Nothing on this
website is intended as legal advice. Any responses to specific questions
are based on the facts as we understand them, and not intended to apply to any
other situations. This communication is not an agency order. If you
need legal advice, please consult an attorney. We attempt to update the
information on this website as soon as practicable following changes or
developments in the laws and rules affecting Oregon employers, but we make no
warranties or representations, express or implied, about whether the
information provided is current. We urge you to check the applicable
statutes and administrative rules yourself and to consult with legal counsel
prior to taking action that may invoke employee rights or employer responsibilities
or omitting to act when required by law to act.
TECHNICAL ASSISTANCE FOR EMPLOYERS
800 NE OREGON STREET, STE 1045
THIS INFORMATION IS AVAILABLE IN AN ALTERNATE FORMAT