Can you garnish commissions

The information in this section applies to wage garnishments based on civil court judgments. This section does NOT apply to:. The order will identify:. These duties are described below.

You must obey all written notices you receive from the sheriff. To figure out when to start withholding earnings garnishing wages , count 10 calendar days from the date you received the order. Start withholding from the first pay period that ends on or after that 10th day after you receive the earnings withholding order.

Keep withholding for all pay periods until you have withheld the amount due as stated in the order, plus any additional amount for costs and interest. The sheriff will let you know the additional amount the employee owes for costs and interest. Do not withhold more than the total of these amounts. If you do, click here for instructions on how to handle situations with more than one earnings withholding order.

Read it carefully. In some cases, an earnings withholding order is not effective when you receive it. This could happen because:. In this situation, do not hold on to the earnings withholding order. If you stop withholding because the employee stops working for you or is out on leave, notify the sheriff who gave you the order, but do not return the order to the sheriff. If the employee returns to work and a pay period ends before days have passed, the earnings withholding order is still valid and you must resume withholding earnings under that order.

If you stop withholding under an earnings withholding order because you receive an order of higher priority for the same employee, notify the sheriff but do not return the order. In these situations, the earnings withholding order ends after no money is withheld under that order for a continuous two-year period. If withholding under the higher priority order ends and it has not yet been two years since any money was withheld under the prior lower priority earnings withholding order, the prior earnings withholding order is still valid and you must resume withholding earnings under that order.

When an earnings withholding order ends, return it to the sheriff and explain in writing why you are returning it. State law limits the maximum amount of earnings that can be withheld from each paycheck. These instructions explain the correct way to calculate the amount. Earnings are monies paid by an employer to an employee for work done by the employee.

The money may be called wages, salary, commissions, bonuses, or some other name. Vacation pay and sick pay are included because they are paid by the employer to the employee. Tips are usually not included because they are not paid by the employer. Since , all new or modified child support orders include an automatic wage withholding order. If child support and alimony are combined into one family support payment, the wage withholding order applies to the whole amount owed; however, orders involving only alimony don't result in automatic wage withholding.

Once the court orders you to pay child support, the court or the child's other parent sends a copy of the order to your employer, who will withhold the ordered amount from your paycheck and send it to the other parent. If you're required to maintain health insurance coverage for your child, the payment for that will be deducted from your paycheck as well.

More of your paycheck can be taken to pay child support. State law sometimes differs a bit. You may not be fired, disciplined, or otherwise retaliated against because your pay is subject to a wage withholding order to pay child support. The U. But you can keep an amount that's equivalent to 30 times the current federal minimum wage per week.

No lawsuit or court order is required for this type of garnishment; if you're in default, your wages can be garnished. If you owe money to the IRS, watch out: The agency can take a big chunk of your wages, and it doesn't have to get a court order first. The amount you get to keep depends on how many dependents you have and your standard deduction amount. Your employer will pay you a fairly low minimum amount each week and give the rest to the IRS.

The IRS must send a wage levy notice to your employer, who is required to give you a copy. The notice includes an exemption claim form, which you can complete and return. State and local tax agencies also have the right to take some of your wages. In many states, however, the law limits how much the taxing authority can take. Contact your state labor department for information on your state's law.

If a judgment creditor is attempting to garnish your wages, you might be able to challenge the garnishment by raising an objection. The procedures you need to follow to object to a wage garnishment depend on the type of debt that the creditor is trying to collect from you, as well as the laws of your state. Generally, though, the process for objecting to a garnishment begins with preparing and filing paperwork. If you believe that your earnings are exempt in full or in part under federal or state law, you should state that fact within your written objection.

Or, depending on the circumstances, you might be able to say that you've already paid the judgment creditor or you received a bankruptcy discharge. The garnishment papers that you receive from the court should contain instructions on what you must do to object to the garnishment. If the garnishment papers you received don't have this information, immediately contact the clerk of the court that issued the garnishment documents to find out this information.

Usually, a form will be included with the garnishment notice that you can use to write your objection and request a hearing. If you didn't get a form, ask for one from the clerk of the court that sent you the garnishment notice. If the court doesn't have a form, write out your objection and file it on time. If you don't state your reasons for objecting to the garnishment and timely file that written objection with the right court, you might have waived your right to fight the garnishment later.

If the court sets a garnishment hearing, you have to go to the hearing to protect your wages. The judge or magistrate will either accept or "sustain" your objection, and the garnishment will be reduced or terminated, or overrule the objection, and the garnishment will proceed. One way to avoid collection actions is by wiping out debt in Chapter 7 or Chapter 13 bankruptcy. It's also important to learn when a small business bankruptcy makes sense. A judgment creditor can't use a traditional wage garnishment against someone self-employed because most states define a "wage" as compensation paid from an employer to an employee.

But don't rest easy just yet. Judgment creditors have another way to get your income—they can use a "garnishment for property other than personal earnings" or "non-earnings garnishment. Keep in mind that a judgment creditor has other methods of debt collection , too, such as hiring the sheriff to take funds out of a business cash register till tap or through property seizure. The collection tools available to a judgment creditor will depend on who owns the business property you as a sole proprietor or another business entity and the name on the money judgment.

Specifically, the two must match. For instance, a judgment creditor with a judgment against John Doe, an individual, will not be able to tap the till of Donuts, LLC, even if John Doe holds an interest in the bakery.

So determining how a creditor could get to your money starts with identifying your role. Factors that could weigh in favor of you being an independent contractor have traditionally included the following:. People in the following professions have traditionally fallen into the category of self-employed individuals who might not be subject to standard wage garnishments:.

But as Californians know see below , rules change. So you shouldn't rely on this list without first verifying your local employment laws. Employees can exempt protect a certain amount of wages from creditors; however, your state's laws might not allow self-employed people to exempt income.

Even so, federal law might still provide some relief. Specifically, a judgment creditor can only garnish the lower of:. Keep in mind that some types of property are also exempt. Most states' bankruptcy exemptions are the same as its general collection exemptions. If your business is a separate legal entity , such as a corporation or limited liability company, the creditor can't go after the property owned by the company. The creditor can only collect against your property—funds earmarked for you as an individual, such as distributions or some other type of asset.