Administrative Wage Garnishment: Notice, Limits, and Hearings

Administrative wage garnishment is a federal collection tool that lets an agency order your employer to withhold up to 15% of your disposable pay each pay period to repay a delinquent non-tax debt you owe the federal government, and it happens without a court order or lawsuit. Before any money is taken, the agency must send you written notice at least 30 days in advance, and you have 15 business days from that notice to request a hearing that can delay or stop the withholding. What you do inside that window largely determines what happens next.

Which Debts It Covers

The authority sits in 31 U.S.C. § 3720D, which lets the head of any executive, judicial, or legislative agency garnish wages when a person owes a delinquent non-tax debt to the United States and is not already making payments under an agreement.¹ Typical examples include defaulted federal student loans, overpayments of federal benefits like Social Security, and defaulted Small Business Administration loans. IRS tax debts are collected under a separate process and are not what this tool is for.

The statute overrides state garnishment law. Because it applies “notwithstanding any provision of State law,” a state that normally caps garnishment more tightly than federal law will not shield you from a federal AWG order.¹ The operating rules that agencies follow are in 31 CFR 285.11.²

The 30-Day Notice

Nothing comes out of your paycheck until the agency has mailed you a written notice at least 30 days before withholding starts.¹ The notice has to tell you the nature and amount of the debt, that the agency intends to collect through paycheck withholding, and every right you have under the statute, including the right to inspect the agency’s records and the right to request a hearing.

This is the document that starts the clock. Set it aside and the 15-business-day hearing window closes; the agency can then send the withholding order straight to your employer. Read it the day it arrives.

How Much Can Be Withheld

Federal law caps each period’s garnishment at the lesser of two amounts: 15% of your disposable pay for that period, or the amount by which your disposable pay exceeds 30 times the federal minimum wage.² The 15% ceiling comes from the statute itself, and the minimum-wage floor is the Consumer Credit Protection Act figure that the Treasury regulation incorporates.¹

With the federal minimum wage at $7.25 per hour, 30 times that is $217.50 per week.³ So if your disposable weekly pay is $400, 15% is $60 while the excess over $217.50 is $182.50; the garnishment is $60, the lesser of the two. For someone earning near the floor, the minimum-wage rule can bring the number below 15%.

What Counts as Disposable Pay

Disposable pay is your total compensation minus amounts required by law to be withheld.¹ In practice, the Bureau of the Fiscal Service treats federal, state, and local income taxes, Social Security and Medicare, health insurance premiums, and involuntary retirement contributions as those required deductions.⁴ Voluntary items such as 401(k) contributions or charitable payroll deductions do not reduce the base the garnishment is calculated on.

If Another Garnishment Is Already Running

Your employer cannot simply stack two orders at full value. The Department of Education’s regulation on multiple orders directs the employer to withhold the lesser of the AWG amount under the 15% formula or 25% of disposable pay minus what is already being withheld under the earlier order.⁵ Family support orders take priority regardless of when they were issued. If child support is already taking 50% of your disposable pay, an AWG order may collect little or nothing on top of it.

Requesting a Hearing

You have 15 business days from the mailing of the notice to submit a written hearing request. If it arrives within that window, the agency generally cannot issue a withholding order to your employer until the hearing is resolved. Miss the deadline and you can still request a hearing, but the garnishment can start in the meantime.²

The request has to state the specific grounds for your objection. Recognized grounds include:

You do not owe the debt, because it is not yours or it was already paid or discharged.
The amount is wrong: the balance, interest, or fees are miscalculated.
The proposed repayment terms are unreasonable given your circumstances.

The hearing is decided by an official who had no role in the original collection decision. That person reviews your evidence along with the agency’s records and issues a written decision to affirm, modify, or cancel the order.¹ Many hearings are decided on paper alone, so the written submission and its supporting documents do most of the work.

Asking for a Hardship Reduction

Even after garnishment has started, you can ask the agency to reduce the amount if your circumstances change. The regulation allows a hardship review when events like serious illness, disability, or divorce make the current withholding untenable.² Send a written explanation with supporting documents: proof of income, medical bills, court orders, or whatever backs up the claim.

If the agency agrees, it lowers the garnishment for a set period and tells your employer the new amount.² The reduction is not permanent by default. If the hardship continues past the initial period, you may need to request another review.

Other Ways to Stop the Garnishment

Negotiate a Voluntary Repayment Agreement

The statute allows AWG only when the person “is not currently making required repayment in accordance with any agreement” with the agency.¹ Contact the agency during the 30-day notice window, agree to a written payment plan, and the garnishment action is typically suspended as long as you keep up. Doing this before the order reaches your employer avoids the disruption entirely.

Pay the Debt in Full

Full payment of the outstanding balance, including interest and fees, ends the collection. The agency then notifies your employer to stop withholding.

Rehabilitate or Consolidate a Defaulted Student Loan

For defaulted federal student loans, rehabilitation involves a series of agreed monthly payments; completing it removes the default and stops collection, including garnishment.⁶ Consolidating the defaulted loan into a new Direct Consolidation Loan can also end the garnishment, though it resets the repayment clock and has its own trade-offs.

File for Bankruptcy

Filing a bankruptcy petition triggers the automatic stay under 11 U.S.C. § 362, which halts most collection actions, AWG included.⁷ The stay reaches “any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case.” Your employer should stop withholding once notified. Whether the underlying debt is ultimately discharged is a separate question, and federal student loans are notoriously difficult to discharge.

Can Your Employer Fire You Over It

Federal law prohibits an employer from firing you because your wages are being garnished for any one debt. Under 15 U.S.C. § 1674, an employer who discharges an employee because of a single garnishment faces a fine of up to $1,000, imprisonment of up to one year, or both.⁸ The protection covers one indebtedness. Multiple garnishments for separate debts are not covered by this statute, though some states offer broader protections.

What Happens If You Do Nothing

Ignoring the notice is the worst option. If no hearing request is filed inside the 15-business-day window, the agency can send the withholding order to your employer as soon as the 30-day notice period ends. Your employer has no choice but to comply. A late hearing request is still possible, but the withholding will keep running while it is pending, and recovering money that has already been taken is much harder than preventing the deduction in the first place.

The garnishment continues every pay period until the debt is paid in full or one of the stopping mechanisms above takes effect. For a large federal debt, that can mean years of reduced paychecks. The first 15 business days after the notice are the point at which you have the most leverage in the entire process.

1
Office of the Law Revision Counsel. 31 U.S. Code 3720D – Garnishment
2
eCFR. 31 CFR 285.11 – Administrative Wage Garnishment
3
U.S. Department of Labor. State Minimum Wage Laws
4
Bureau of the Fiscal Service. Frequently Asked Questions for Individuals about Administrative Wage Garnishment
5
eCFR. 34 CFR 34.20 – Amount to Be Withheld Under Multiple Garnishment Orders
6
Federal Student Aid. Student Loan Rehabilitation for Borrowers in Default: FAQs
7
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
8
Office of the Law Revision Counsel. 15 U.S. Code 1674 – Restriction on Discharge From Employment by Reason of Garnishment