New Law May Reduce Amount Subject to Wage Garnishment

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In case you missed it, Senate Bill 501, a law which became effective on July 1, 2016, may reduce the prohibited amount of weekly disposable earnings that may be garnished depending on where the employee works.

Specifically, SB 501 adjusts the existing statutory scheme, which limits the amount of an individual judgment debtor’s weekly disposable income subject to garnishment to the lesser of 25% of the disposable earnings or the amount by which the individual’s disposal earnings exceed 40 times the state minimum wage, to now include the possibility of a higher local minimum wage. “Disposal earnings” is still defined as earnings after required withholdings. So employees who work in areas with a minimum wage higher than the current California rate of $10.00 per hour, such as in Santa Monica, San Francisco or Los Angeles, may have fewer wages available for garnishment. If you have any issues with wage garnishment then you may want to contact a tax attorney nj who may be able to help you with any issues you have.

 

This alert is intended to note current legal trends in commercial lending and risk management issues. No alert should be construed as representing advice on specific, individual legal matters, but rather as an overview of the subject discussed. Your questions and comments are always welcome. Please do not hesitate to contact me at kscott@ecjlaw.com to further discuss this alert or to answer any questions.