You may have heard of wage garnishment or earnings withholdings. These terms mean that someone you owe money to has served a court order to your employer demanding they take money out of every paycheck to pay the amounts due (usually 25% of your “take home” amount). In California, this is called an Earnings Withholding Order (EWO). There are a few different earnings withholding orders in California law that vary depending on what the debt is for and to whom the money is owed. Whatever the reason for a creditor trying to take money from your earnings, you will undoubtedly benefit from understanding the law and how it might apply to your unique case.
Types Of Earnings Withholding Orders In California
Different debts are categorized based on why the money is due and who is trying to collect it. Suppose someone took you to court and got a money judgment for an amount due on a debt. In that case, they may get an EWO based on that money judgment to collect a set amount from every paycheck until the debt, plus any interest and fees that are legally included in the judgment, are paid in full. On the other hand, if the government claims taxes due, a government agency may get an EWOT (Earnings Withholding Order for Taxes) that has the same effect—ordering your employer to deduct a certain amount from your earnings to pay the taxes due. Similar proceedings are also available for the state to collect court orders like amounts due for your child or spousal support.
How An EWO Starts
When someone has a money judgment against you, the court won’t automatically make you pay as soon as the judgment is entered. It is up to the person who got the court to issue the judgment to take the following steps to enforce or collect on the order. If the judgment creditor doesn’t take the next steps, the judgment will sit on the court records for ten years, when it naturally expires if it hasn’t been renewed.
The first step a judgment creditor must take is to go to court to file the judgment and request the EWO. The judgment creditor must establish the facts and details of the money judgment and identify the person who owes the money and who employs that person. When they have established the order basics, they take the EWO to the county sheriff in the area where you work. The EWO will identify the name of the employee who owes money, the person to whom the money is owed, the sheriff or marshal responsible for collecting the money, and the total amount owed.
The agency in charge of collecting the money, usually the county sheriff, is called the levying officer in the EWO process. They provide your employer with documents explaining the employer’s responsibilities and the notices that must be given. As an employee who may be subject to an EWO, you will have 15 days from when you get notice of the EWO to file an objection, or a Claim of Exemption, from the order.
Amount Of Money An EWO Can Take From Your Pay
There are limits, of course, on the amount of money that a judgment creditor can have withdrawn from your earnings. The amount that can be deducted is calculated based on your disposable earnings. This amount is different from your total net pay, which is the full amount of your earnings before taxes and deductions, and it may also be different from your take-home pay. Disposable earnings are the amount remaining in your paycheck after deductions for things like:
- Federal income tax
- Social security and Medicare deductions (called FICA)
- State income tax
- Local taxes, if any
- Mandatory payments to a public employee retirement system, if applicable
It is also essential to know the amount of the minimum wage that applies in your area. The state has a minimum wage that might apply, but some cities or counties, such as Oakland, Los Angeles, and others, have higher minimum wage amounts that may apply if you live there. The maximum amount that can be deducted from your paycheck is the lesser of two amounts: either 25 percent of your disposable earnings or 50 percent of the difference between your disposable earnings and the minimum wage that applies to you.
Your employer must calculate the two amounts and determine which formula leads to legally deducting the correct amount from your pay. Different companies calculate pay in various ways; some pay weekly, some bi-weekly (every two weeks), some issue paychecks twice monthly, and some pay once per month. Your employer will calculate the amount due for each pay period after deductions and the required calculations discussed above.
Where The Money Goes
After your employer calculates the amount (if any) they can deduct from your pay, they must separate that amount from your paycheck and send it to the levying officer, usually the county sheriff or marshal. The levying officer is responsible for sending the funds to the judgment creditor to whom the money is owed. Just like taxes and other mandatory deductions, the amount authorized to be removed by an EWO comes from your earnings before the money is given to you in a paycheck or electronic deposit in your account. You will get a record of what was deducted, but you cannot access that part of your earnings.
What Are Your Options If You Are Facing An EWO?
Just because a judgment creditor has filed to collect money from your paycheck doesn’t mean it will happen. You have valid defenses that might apply in your case to protect your money from wrongful collection. It is critical to talk to an experienced debtor’s rights attorney who can analyze the unique facts of your case and assess your options. You have the right to a minimum amount of money to support your needs, of course, but the debtor has the right to take a portion if there is enough left over after your basic necessities of life are covered.
Get Legal Advice For Your Case
Each EWO is based on the specific facts of the case, including the amount owed, the earnings you take home after deductions, and any other valid exemptions or exceptions to the deductions. Contact the skilled legal advisors at Fitzgerald & Campbell, APLC by calling 844-431-3851 or visiting us online for advice on how to proceed. Time is of the essence when you are facing an EWO; don’t delay taking the steps that can protect your resources from creditors.