Who's Most Likely to Have Their Wages Garnished?

More than one in 10 workers ages 35 to 44 had their wages garnished in 2013, mostly for child support and consumer debt, according to a report from human resources management firm ADP. People in that age bracket tend to have large debt loads, go through divorce and raise their children, stretching thin some workers’ finances, hence the high rate of wage garnishment.

ADP Research Institute analyzed anonymous 2013 payroll data for 13 million Americans ages 16 and older, revealing 7.2% of employees experienced wage garnishment in 2013. You could have your wages garnished for failing to pay a variety of things, including court-ordered child support, student loans, taxes or other consumer debt. People who have declared bankruptcy may also see their paychecks shrink.

Child support is the most common reason someone’s wages are garnished. In 2013, 3.4% of wages were garnished for child support, 2.9% for “other” (generally consumer debt), 1.5% for tax levies and 0.4% for bankruptcy. In a few cases, employers withheld wages for multiple reasons. With the exception of child support, wage garnishment comparably affects men and women. Men have child support withheld at a rate 5% greater than women do.

The Profile of Wage Garnishment in the U.S.

People of all backgrounds experience wage garnishment, but it’s most common among a certain type of person. Based on the payroll data analyzed by ADP, employees with garnished paychecks generally fit this profile: He’s a white male living in the Midwest who earns between $25,000 and $39,999 a year. He works in manufacturing for a large employer (more than 5,000 employees), and his wages are being garnished to make child support payments.

More than 48% of manufacturing firms employed at least one garnishee. The industries with the fewest garnishees (23%) were education and health services; professional and business services; and financial activities.

The Cost of Wage Garnishment

Depending on the reason behind the court order, employees can lose a significant amount of their earnings to wage garnishment. Title III of the Consumer Credit Protection Act limits withholding to 25% of disposable income earned in a pay period or 30 times the minimum wage — whichever formula amounts to a smaller garnishment. That generally applies to consumer debt, but child support, bankruptcy or tax payments may require higher garnishment rates. If the employee is supporting a child or spouse who is not the subject of the judgment, up to 50% of the worker’s wages can be garnished for child support. If the worker isn’t supporting anyone, they may lose 60% of their pay.

How to Avoid Wage Garnishment

As soon as you find yourself struggling to pay bills, do something about it. Either find a way to rearrange your finances so you can meet debt and other payment obligations, and if there’s no way to make that happen, communicate with your creditors. If a collections account is the subject of your concern, see if you can settle it for less than you owe. If student loan payments are your problem, work out a payment plan with your loan servicer, so you don’t suffer the consequences of default.

The easiest way to prevent your wages from being garnished is to keep an eye on your credit reports and scores so you can spot an unpaid bill or judgment as soon as possible. You can get your credit reports for free once a year under federal law, and you can check your credit scores for free every month on Credit.com.

Wage garnishment will place a significant burden on your finances, so it’s best to avoid it if at all possible. Reach out to whomever you owe money before the situation devolves into one requiring wage garnishment, but if you’ve already gotten to that point, try to remain positive. Do whatever you can to minimize your expenses so you don’t fall further into debt, and create a plan for emerging from your financial hole.