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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Mandatory Deductions
Administrative Wage Garnishments to Pay Federal Non-Tax Debts

Background

The United States Department of the Treasury developed the Administrative Wage Garnishment 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.

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Garnishment Amounts

Federal agencies may garnish up to 15 percent of the disposable pay of an individual without 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.

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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.

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Prioritizing Multiple Garnishments

Administrative wage garnishments have the same priority as student loan garnishments. If an individual has multiple federal garnishments with the same priority (e.g. a student loan and an administrative wage garnishment), the garnishments should be deducted in the order they are received.

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Administrative Fees

State agencies may deduct a monthly administrative fee from the employee’s disposable earnings in addition to the amount required to be withheld under the withholding order. The fee amount may not exceed the lesser of $10 or the actual administrative cost incurred by the employer in complying with the withholding order.

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Other Considerations

This Administrative Wage Garnishment process does not apply to income withholding for Child Support under Chapter 158 of the Family Code.

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Additional Resources

To learn more about this payroll deduction, see Chapter 9 “Deductions” of the USPS Process Guide or the SPRS Deduction Code Table.

Definition

Disposable pay
Part of the "compensation" of the individual from an "employer" remaining after the deduction of any "amounts required by law to be withheld."

The treasury regulation 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."

Sources

31 United States Code Service, Sections 3701(a)(4), (8), (b)(1), 3720D (a), (b)(1), (6), (f)(1)(B), (3), (g) (Law. Co-op 2000); 31 Code of Federal Regulations (CFR), Section 285.11(b)(2), (c) – (d), (g), (i)(1) – (2), (3)(i) – (ii), (4) –(6), (8), (j), (o) (2000; 31 CFR, Section 285.11(b)(1) (2000); Texas Civil Practice and Remedies Code, Section 63.006 (Vernon 2004).

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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