HOUSE BILL REPORT
E2SHB 1687
As Passed Legislature
Title: An act relating to wage garnishment.
Brief Description: Reducing the impact of wage garnishments on employers.
Sponsors: By House Committee on Appropriations (originally sponsored by Representatives Sheahan, Delvin, Sheldon, McMorris, L. Thomas, Mielke, Grant, Morris, Benson, D. Schmidt, Alexander, D. Sommers, Johnson, Thompson, Talcott and Boldt).
Brief History:
Committee Activity:
Law & Justice: 2/28/97, 3/4/97 [DPS];
Appropriations: 3/7/97 [DP2S(w/o sub LJ)].
Floor Activity:
Passed House: 3/14/97, 61‑33.
Senate Amended.
House Concurred.
Passed Legislature.
HOUSE COMMITTEE ON LAW & JUSTICE
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 12 members: Representatives Sheahan, Chairman; McDonald, Vice Chairman; Sterk, Vice Chairman; Costa, Ranking Minority Member; Carrell; Cody; Kenney; Lambert; Lantz; Radcliff; Sherstad and Skinner.
Minority Report: Do not pass. Signed by 1 member: Representative Constantine, Assistant Ranking Minority Member.
Staff: Trudes Hutcheson (786-7384).
HOUSE COMMITTEE ON APPROPRIATIONS
Majority Report: The second substitute bill be substituted therefor and the second substitute bill do pass and do not pass the substitute bill by Committee on Law & Justice. Signed by 29 members: Representatives Huff, Chairman; Alexander, Vice Chairman; Clements, Vice Chairman; Wensman, Vice Chairman; H. Sommers, Ranking Minority Member; Doumit, Assistant Ranking Minority Member; Gombosky, Assistant Ranking Minority Member; Benson; Carlson; Chopp; Cody; Cooke; Crouse; Dyer; Grant; Keiser; Kenney; Kessler; Linville; Lisk; Mastin; McMorris; Parlette; Regala; D. Schmidt; Sehlin; Sheahan; Talcott and Tokuda.
Staff: Beth Redfield (786-7130).
Background: There are several ways to satisfy a judgment or enforce a child support order. A private party can attempt to satisfy a judgment against an obligor by obtaining a civil order to garnish a person=s earnings or property. The garnishee is the person who has the obligor=s property, and in many cases, is the obligor=s employer. To enforce spousal maintenance or child support obligations, a court or the Division of Child Support (DCS) may issue an income withholding order to the obligor=s employer. There are certain procedures a party must comply with to obtain a garnishment order or an income withholding order. A garnishee or employer has certain duties upon receiving a notice of garnishment or income withholding order.
Civil Garnishment Orders:
Under the statutes governing the enforcement of judgments, the garnishee receiving a garnishment order is required to answer the order within 20 days. If the garnishee fails to answer the order, the garnishee could be liable for the full amount of the judgment, along with interests and costs, whether or not the garnishee owes anything to the obligor.
Service of the garnishment order upon the garnishee is invalid unless it is served with, among other things, a cash or a check made payable to the garnishee in the amount of $10. This is generally called an Aanswer fee.@
Except in cases of child support enforcement, the amount of earnings for each week that are exempt from garnishment is the greater of:
(a)30 times the federal minimum hourly wage in effect at the time the earnings are payable; or
(b)75 percent of the obligor's disposable earnings.
In child support cases, an employer cannot withhold more than 50 percent of the obligor's disposable earnings.
Generally, a federal employee's wages are subject to garnishment in the same manner and extent as if the federal agency were a private person.
Spousal Maintenance and Child Support Orders:
Notices of payroll deductions and wage withholding orders for child support have priority over other civil garnishment orders. The court may issue a wage withholding order to an employer to enforce a child support or spousal maintenance order. The DCS may issue a notice of payroll deduction to an employer, or to the Employment Security Department if the parent ordered to pay child support is receiving unemployment compensation.
The employer or the Employment Security Department has 20 days to answer the order or notice, and may deduct a processing fee from the employee=s earnings or unemployment compensation. The fee must not exceed $10 for the first disbursement made by the employer and $1 for each subsequent disbursement.
If the employer fails to respond to a wage assignment order, fails or refuses to comply with the order, or is unwilling to comply with other requirements, the employer may be liable for 100 percent of the obligor=s spousal maintenance or child support debt, or the amount of support that should have been withheld from the employee=s earnings, whichever is less.
The notice remains in effect until released by the office of support enforcement, the court enters an order terminating the notice, or one year has expired since the employer has employed the obligor or has been in possession of the obligor=s earnings, or the Employment Security Department has been in possession of or owing any unemployment compensation benefits to the obligor. If the obligor returns to the employer during that period, the employer is required to immediately begin withholding the obligor=s wages according to the terms of the order.
Summary of Bill:
Civil Garnishment Orders:
Before the garnishee can be held liable for the full amount of the judgment when the garnishee fails to timely respond to the order, a notice must be given to the garnishee at least 10 days before entry of the judgment.
The requirement for an answer fee is eliminated, but the garnishee may deduct a processing fee from the obligor=s earnings. The processing fee must not exceed $20 for the first disbursement. If the garnishment is a continuing lien, the garnishee may also deduct $10 at the time of the final disbursement.
If any nonexempt wages remain after withholding for child support, the garnishee must withhold from the remaining nonexempt wages for any civil garnishment order.
A standard form and general procedures are created for the service of garnishment orders on the federal government.
Spousal Maintenance and Child Support Orders:
An employer who fails to timely respond to a wage withholding order or notice of payroll deduction for spousal maintenance or child support will be liable only for the amount that should have been withheld. The processing fee is raised from $10 to $15 for the first disbursement.
The employer must notify the office of support enforcement when the employee leaves employment. The employer must retain the order until the employer no longer possesses any earnings owed to the obligor. A notice of payroll deduction remains in effect with the Employment Security Department until released by the office of support enforcement or the court enters an order terminating the notice.
Miscellaneous:
A task force is created made up of representatives from various state agencies, collection agencies, and representatives from small businesses to establish simplified garnishment procedures and a standard form to reduce paperwork and confusion. The task force must also study the ability of the DCS to pay for the employers= processing fees.
Appropriation: None.
Fiscal Note: Available.
Effective Date Ninety days after adjournment of session in which bill is passed.
Testimony For: (Law & Justice) Raising the processing fees will help employers with the costs of wage withholding. Wage withholding and garnishment orders are confusing for small businesses. Creating a task force to recommend standard procedures will help reduce paperwork.
(Appropriations) Wage garnishment is a paperwork and cost burden on employers.
Testimony Against: (Law & Justice) Employers are willing to help creditors satisfy debts and help families collect child support, but the procedures and requirements should not be so burdensome and costly. Changes need to be made to the bill to reflect the needs of all interested groups.
(Appropriations) None.
Testified: (Law & Justice) Cliff Finch, Association of Washington Business (pro); Carolyn Logue, Federation of Independent Businesses (pro, with suggestions); Betty Neighbors, citizen (pro, with suggestions); John Grimm and Pete Rosvall, Washington Collectors Association (con, with suggestions); Mike Ricchio, Department of Social and Health Services, Division of Child Support (con, with suggestions); and Gary Gardner, Washington Credit Union (con).
(Appropriations) Carolyn Logue, National Federation of Independent Business.