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Texas Payroll/Personnel Resource

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Administrative Wage Garnishments to Pay Federal Non-Tax Debts

Background

The United States Department of the Treasury developed the administrative wage garnishment process to collect delinquent non-tax debts from individuals who owe the federal government. State agencies may be required to collect delinquent federal non-tax debts such as food stamp fraud and overpayments, or lost military property.

Garnishment Amounts

Federal agencies may garnish up to 15 percent of the disposable pay of an individual without a court order. Disposable pay is the part of the compensation to the individual from an employer remaining after the deduction of any amounts required by law to be withheld.

The Code of Federal Regulations agrees with the preceding definition except that health insurance premiums are also deducted from compensation to arrive at disposable pay. Compensation includes, but is not limited to, salary, bonuses, commissions and vacation pay. “Amounts required by law to be withheld” include amounts for deductions such as Social Security taxes and withholding taxes, but do not include any amount withheld pursuant to a court order. The amount garnished during any pay period may not exceed the lesser of 15 percent of the individual’s disposable pay or an amount equal to 30 times the minimum wage, unless the individual gives written consent to deduct a greater amount.

Wage Garnishment Order

A garnishment order may be issued by a federal agency or a private collection agency under contract to collect the debt. Federal agencies are required to provide the Wage Garnishment Order (Form Series SF-329) PDF.

Both federal agencies and collection agencies must have an established payee number in the Comptroller’s Texas Identification Number System (TINS).

State agencies must comply with the federal government’s administrative wage garnishment orders, but are not required to vary normal pay and disbursement cycles to comply with the withholding order.

State agencies must continue deducting the amount garnished until notification is received from the federal agency or collection agency to discontinue the withholding.

Sources

31 United States Code, Sections 3701(a)(4), (8), (b)(1), 3720D (a), (b)(1), (6), (f)(1)(B), (3), (g); 31 Code of Federal Regulations, Sections 285.11(b)(2), (c)-(d), (g), (i)(1)-(2), (3)(i)-(ii), (4)-(6), (8), (j), (o); Texas Civil Practice and Remedies Code, Section 63.006.