SB 501: Wage garnishment restrictions.

The Wage Garnishment Law prescribes the procedure for withholding an employees earnings for purposes of paying a debt. The law requires that a levy of execution upon the earnings of an employee be made by service of an earnings withholding order upon the employer. An earnings withholding order is issued by a levying officer upon receiving an application submitted by a judgment creditor, as specified. Existing law prohibits the amount of an individual judgment debtors weekly disposable earnings subject to levy under an earnings withholding order from exceeding the lesser of 25% of the individuals weekly disposable earnings or the amount by which the individuals disposable earnings for the week exceed 40 times the state minimum hourly wage in effect at the time the earnings are payable, as specified, unless an exception applies. An employer is required, except as otherwise provided by statute, to withhold the amounts required by an earnings withholding order from all earnings of the employee payable for any pay period of the employee which ends during the withholding period.

This bill would, commencing July 1, 2016, reduce the prohibited amount of an individual judgment debtors weekly disposable earnings subject to levy under an earnings withholding order from exceeding the lesser of 25% of the individuals weekly disposable earnings or 50% of the amount by which the individuals disposable earnings for the week exceed 40 times the state minimum hourly wage, or applicable local minimum hourly wage, if higher, in effect at the time the earnings are payable.