Frequently Asked Questions about Administrative Wage Garnishment
Under federal law, a federal agency may, without first obtaining a court order, order an employer to withhold up to 15 percent of a debtor's wages for payment to the federal agency to satisfy a delinquent non-tax debt. See 31 U.S.C. § 3720D; 31 CFR § 285.11.
For more information, read about Administrative Wage Garnishment (AWG).
A federal agency can use AWG to collect delinquent debt if a debtor is employed and not paying a debt as agreed. AWG may be used to collect a debt even if state law does not allow wage garnishment. A federal agency may not garnish a debtor's wages if the debtor has not been in their current job for at least 12 months and was involuntarily separated from their previous job.
At least 30 days before beginning AWG, a written notice must be sent to you at your address last known to the federal agency. This AWG notice must state the nature and amount of the debt, the agency’s intention to begin garnishment, and an explanation of your rights
Before AWG begins, you are entitled to enter into a repayment agreement, acceptable to the federal agency, pay the debt in full or request a hearing.
You must send a request for a hearing, with written evidence to support your claim, to the address listed in your AWG notice. To have a hearing before AWG begins, you must request a hearing within 15 business days after AWG notice is mailed to you. The federal agency may continue the AWG process if you request a hearing after the 15-day period.
You may request a hearing concerning the existence or amount of the debt, or the terms of the proposed repayment schedule under the garnishment order. The federal agency will determine whether your hearing will be oral or written. If the agency decides to hold an oral hearing, the agency will decide when and where the hearing will be held, and you may decide whether the hearing will be held in-person or by telephone.
You will have to pay your own travel expenses for an in-person hearing. If you received a Notice of Intent to Initiate Administrative Wage Garnishment from the Department of the Treasury, you may follow these instructions to request a hearing.
The federal agency will choose a hearing official to review and decide your case. The federal agency will have to prove that you owe the debt. You will have to prove why you disagree with the federal agency. The hearing official must issue a written opinion as soon as practicable. If the decision is not made within 60 days of the hearing, AWG must stop until the agency decides.
A federal agency can order your employer to deduct up to 15 percent of your disposable pay. Disposable pay means your compensation (salary, bonuses, commissions, vacation pay, etc.) after deduction of any health insurance premiums, federal, state, and local taxes, and involuntary retirement or pension payments. You are entitled to keep an amount equal to 30 times the current federal minimum wage. If your pay is being garnished for other debts, the deduction for AWG will be reduced so that your total garnishments do not exceed 25 percent of your disposable pay.
You may, at any time during the AWG process, ask the federal agency to review whether the amount being deducted from your pay should be reduced based on a material change in your situation, which results in a financial hardship.
Under federal law (31 U.S.C. § 3720D), your employer may not fire you, refuse to employ you, or take any disciplinary action against you because your wages are being garnished.