Garnishments & Wage Deductions Flashcards
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All states require employers to report new hires to a state directory primarily to support which garnishment-related function?
Answer: Child support income withholding order issuance
New hire reporting was mandated by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 to help child support agencies locate non-custodial parents and issue income withholding orders.
When calculating the garnishable amount, the CCPA's 30x minimum wage floor means that an employee's disposable earnings must exceed this floor before any creditor garnishment can occur. If the federal minimum wage is $7.25/hour, what is the weekly protected floor?
Answer: $217.50
30 times $7.25 equals $217.50 per week, meaning disposable earnings must exceed $217.50 before any creditor garnishment can be taken.
An employer receives a lump-sum payment order directing that a bonus be withheld for child support. What percentage of the lump-sum bonus is typically subject to withholding?
Answer: Up to 100% of the bonus depending on the order and arrears owed
Many states allow up to 100% of lump-sum payments such as bonuses to be seized for child support arrears, and employers are often required to notify the child support agency before paying the bonus.
Under which circumstance should an employer stop withholding under an income withholding order for child support?
Answer: When the employer receives a notice to terminate the withholding from the issuing agency or court
An employer must continue withholding until the issuing child support agency or court sends an official order to terminate the withholding; the employee's request alone is not sufficient.
Which statement about state garnishment laws is accurate?
Answer: If state law provides greater protection to the employee than federal CCPA limits, the employer must follow state law
When state law provides greater protections for employees than the federal CCPA minimums, the employer must apply the more protective state law.
An employee has two creditor garnishments. The first was received March 1 and the second March 15. The maximum combined creditor withholding is $100/week. How should the employer apply the garnishments?
Answer: Apply the full $100 to the first garnishment until satisfied, then begin the second
Creditor garnishments are generally satisfied in the order they were received; the first-in-time order is paid to the CCPA maximum before any funds are applied to later orders.
For payroll compliance purposes, how long must employers generally retain garnishment orders and related withholding records?
Answer: At least 3 years after the last payment is made
Under FLSA recordkeeping requirements and general garnishment compliance guidance, employers should retain garnishment orders and payment records for at least three years after the order is terminated.