Because of a lack of substantiated information about U.S. wage garnishment trends, the following study has been developed to provide insight into employee debt recovery through pay seizure. A better understanding of garnishment may help employers provide new opportunities and improved support in the area of debt management. For this analysis, the ADP Research Institute® used aggregated, anonymous payroll data from 2013, comprised of 13 million employees ages 16 and older. The garnishment rate in this study was defined as the proportion of employees having wages garnished out of the total labor force.
When wages are garnished, an employer withholds money from an employee’s paycheck and sends these funds to a creditor until the established debt is paid in full. The impact is often humiliating and stressful for employees. It can result in decreased productivity and motivation that can be detrimental to the affected employee, workplace, and employer. Employers also may be exposed to financial risk in garnishment cases and become liable to creditors for an employee judgment. Both employer and employee interests could be served if companies became more proactive in helping those being garnished and potentially decreasing future garnishments.
