According to a paper from the ADP Research Institute titled U.S. Wage Garnishment Landscape: Through the Lens of the Employer, 7 percent of the worker population has a garnishment. If you’re a small employer you’re more likely to have employees whose wages are being garnished than if you were a large employer.
The problem of garnishment also is particularly prevalent among certain demographics of employees — but regardless of the company and employees, wage garnishment is a major factor contributing to stress at work. Understanding who these workers are and what factors are at play in their garnishment can help employers provide resources and support to alleviate their stress.
Of the segment of the working population subject to wage garnishment, 71 percent of garnishment actions involve men, 92 percent of which involve child support. The typical garnished worker is a middle-aged, male worker with children and income under $60,000.
Employees between the ages of 35–54 — GenXers — incurred the most garnishments. Workers in the narrower age band of 35–44 were the targets of the most garnishment actions, accounting for 10.2 percent of all collection activity. These workers also have the highest average number of garnishments (1.45) and corresponding rate of garnishment due to child support (1.27 percent) and other garnishment, including student, consumer, and credit card debt (1.33 percent).
Who are their debtors? Child support accounts for 3.4 percent of all garnishment actions, while student loan debt accounted for 2.9 percent, tax levies 1.5 percent, and bankruptcy 0.4 percent.
Approximately 12 percent of those with a garnishment actually have more than one, with the Midwest having employees with the highest average number of garnishments, at 1.49. In addition, the goods-producing sector has higher garnishment rates, a higher average number of garnishments and greater average income per garnished employees across all states.
Only 29 percent of women have garnishments, and they also carry a lower average number of garnishments, at 1.37. And while men are on the hook mostly for child support, women end up being garnished over student loans and consumer debt.
Smaller firms garnish wages at a higher rate, the study finds, with 13 percent of small firms garnishing wages in comparison to 8.7 percent of large firms. Midsized firms of 50–999 employees) garnish at a similar rate to large firms.
And woe betide them if they don’t garnish an employee’s wages; the failure to withhold or remit wages can get an employer a contempt of court order, fines, penalties and attorney’s fees and costs. In some jurisdictions, employers that do not withhold a worker's wages can find themselves liable for the entire amount that their employee owes.
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