Definition: Wage garnishment occurs when an employer must withhold an employee's earnings to pay a debt as settled in a court order or other legal procedure (i.e. state tax collection, unpaid child support, or Internal Revenue Service (IRS)).
The Consumer Credit Protection Act of 1968 (CCPA) is a federal wage garnishment law. CCPA prevents an employer from discharging an employee because their wages have been garnished for a debt, and restricts the amount of earnings that can be garnished in a workweek. CCPA is administered by the Wage and Hour Division (WHD) of the Department of Labor's (DOL) Employment Standards Administration (ESA).
There are limits to how much of your paycheck can be withheld to pay for debts. The limit is higher for current child support obligations.
Also Known As: garnish wages, garnish pay
Examples:
Linda was faced with wage garnishment when she had severe credit card debt.
