In a BLR webinar entitled ‘Payroll: How To Legally Handle Tax Levies and Garnishments’, attorneys Clint Robison and Amy Jensen discuss what disposable earnings are and how to differentiate them from other monies that are attached to an employee. The attorneys explain that garnishments can typically be based upon ‘disposable earnings’ and these disposable earnings are defined as the amount left after legally required deductions are made for the following items:
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- Federal, state, and local tax
- State Unemployment Insurance
- Social Security
- Employee retirement systems as required by law
Tips are not generally considered earnings for the purposes of wage garnishment law, but check your state law. Tip pools, on the other hand, where all the money from tips are collected in one place and then an employer distributes or controls such money, can be considered as earning for purposes of wage garnishment
Clint Robison is a partner in the Los Angeles office of Hinshaw & Culbertson, one of the largest and oldest law firms in the country, where he leads its west coast labor and employment practice. Clint Robinson can be reached at crobison@hinshawlaw.com. Amy Jensen is a senior employment attorney in the firm's Los Angeles Office, who provides counseling and litigation services to a variety of companies, including restaurants, retail, manufacturing, and financial companies. Amy Jensen can be reached at ajensen@hinshawlaw.com.