What You Need to Know About Wage Deduction Under Georgia Law

Under certain circumstances, an employee may withhold a certain amount of money from an employee’s paycheck. Here’s everything you need to know about wage deduction laws in Georgia.

Georgia follows federal law, which prohibits certain wage deductions considered primarily for the employer’s benefit if they cause the employee’s earnings to fall below the federal minimum wage. Other wage deductions and garnishments are legal under federal and state laws.

Which laws regulate wage deduction in Georgia?

Georgia has no law regulating which deductions an employer may withhold from an employee’s paycheck. By default, federal law applies to wage reduction practices in Georgia.

The two most important federal laws governing wage reductions are the Fair Labor Standards Act (FLSA), which prohibits specific deductions, and Title III of the Consumer Credit Protection Act (CCPA), which regulates wage garnishment.

Note that Georgia law includes provisions regarding wage garnishment, but they follow federal law for the most part.

Which wage reductions does the FLSA prohibit?

Under the FLSA, a wage deduction considered as “primarily for the benefit or convenience of the employer” cannot reduce an employee’s pay to below the minimum wage or overtime pay. The FLSA sets the federal minimum wage at $7.25 an hour and the minimum overtime pay rate at 1.5 times the regular pay rate.

Wage deductions benefiting the employer are legal under the FLSA if the employee’s wage still exceeds the federal minimum wage after the deduction.

Wage deductions benefiting the employee are legal under the FLSA even if they reduce the employee’s wage to below the federal minimum wage.

Related: Georgia Minimum Wage FAQs

What wage deductions are typically considered primarily for the benefit of the employer?

Wage deductions typically considered primarily for the benefit of the employer include:
· cost of uniforms required by the employer;
· cost of tools used in the employee’s job;
· compensation for damages to the employer’s property by an employee or third parties;
· compensation for financial losses due to clients not paying bills.

Who does the FLSA cover?

FLSA standards on wage deductions apply to all employers who:
· have an enterprise of at least two employees which makes an annual dollar volume of sales or business of at least $500,000
· have an enterprise of at least two employees defined under the FLSA as either:
o a hospital
o a business providing medical or nursing care for residents
o a school or a preschool
o a government agency.
· have employees engaged in interstate commerce.

Is wage garnishment an authorized wage deduction in Georgia?

The US Department of Labor defines wage garnishment as the legal procedure by which a court order requires an employer to withhold an employee’s earnings to pay a debt. Wage garnishment is legal under federal and state law.

What are some common wage garnishment procedures in Georgia?

Common wage garnishment procedures concern child support, payment of loans, payment of unpaid fines, and tax debt.

How much can creditors garnish from an employee’s wages?

Federal law and the Official Code of Georgia Annotated (O.C.G.A) establish two garnishment amount limits. Employers may withhold one of the following amounts of money for garnishment, whichever is less:
· 25% of an employee’s disposable earnings for a given week, under 15 U.S.C. § 1673;
· or the amount by which an employee’s earnings for that week exceed $217 (i.e., 30 times the federal minimum wage of $7.25), under O.C.G.A. 18-4-5.

However, an employer may only withhold 15% of an employee’s disposable income if the garnishment aims at repaying a student loan.

Related: Tipped Employee Rights in Georgia

Can I challenge wage garnishment in Georgia?

Yes, an employee may challenge a wage garnishment by filing a written objection with the court. The documents received by the employee to inform them of the procedure should include instructions to file an objection.

What should I include in my written objection to wage garnishment in Georgia?

In a written objection to wage garnishment in Georgia, an employee should mention the grounds for the objection. These grounds explain why the employee’s earnings should be exempt from garnishment, for example, if the employee filed for bankruptcy or if the garnishment causes undue financial hardship to the employee.

What is the procedure in court after filing a written objection in Georgia?

After receiving the objection, the court will provide a garnishment hearing to allow the employee to defend their claim of exemption.

Can an employer fire an employee whose earnings are subject to garnishment?

No, under Title III of the CCPA, an employer annoyed with the garnishment procedure cannot fire an employee because their earnings are subject to garnishment.

This protection only applies if the employer withholds an employee’s pay for one single debt. The CCPA doesn’t cover employees who must repay several debts.

Can the IRS garnish an employee’s wages for taxes?

Yes, the IRS can garnish an employee’s wages due to unpaid taxes, and it doesn’t need a prior court judgment. The limits applying to maximum garnishment amounts differ from regular debts, as the Tax Code only mentions the minimum amount an employer should leave to the employee for IRS garnishment.

Can an employer withhold pay for child support in Georgia?

Yes, child support is a common type of wage garnishment. An employer can withhold pay for child support once the non-paying parent files an Income Deduction Order with a Georgia court.

Can an employer withhold pay for federal loan repayment in Georgia?

Yes, an employer may withhold up to 15% of an employee’s earnings for federal loan repayment. Wage garnishment will continue until the employee pays off the defaulted loan or resolves the default status.

What is considered “disposable income” for wage garnishment purposes?

Disposable income is the amount left after an employer subtracts mandatory deductions from an employee’s paycheck. Mandatory deductions include federal income tax, state income tax, and Social Security taxes.

How should Georgia employers prioritize wage deductions if an employee is subject to several garnishments and withholdings?

An employee may face multiple withholding orders at a time. In this case, their employer will prioritize garnishments in the following order:

  1. Federal tax levies;
  2. Child support withholding;
  3. Other types of garnishment;
  4. Student loans and other types of federal government agencies.

Can an employer deduct wages for meals in Georgia?

Yes, an employer who offers meals to their employees may deduct wages by the cost of meals. This deduction is legal even if it causes the employees’ final earnings to fall under the federal minimum wage because meals benefit the employee (not the employer).

However, the employer can only charge the employee with the meal cost without making any profit.

Is wage deduction for meals allowed if the employee doesn’t want the meal?

No, wage deduction for meals is allowed on a voluntary basis. If the employee prefers to eat on their own, their employer cannot deduct the cost of the unwanted meal from their wages.

Can an employer deduct wages for housing in Georgia?

Yes, an employer who offers living quarters or housing to their employees may deduct the cost of housing from the employees’ paycheck. The provision of housing benefits the employee (not the employer), so this wage deduction is legal even if it causes the employee’s earnings to fall under the federal minimum wage.

Like meal-related deductions, employers must charge employees with the actual cost of housing without making any profits.

Can an employer deduct wages for transportation costs in Georgia?

Yes, an employer who provides transportation to the workplace may deduct the cost of transportation from the benefiting employees’ pay, even if the deduction reduces the employees’ earnings to below the federal minimum wage.

Can an employer deduct wages for mistakes in Georgia?

Georgia law does not regulate wage deduction for mistakes. The FLSA considers compensation for mistakes as primarily convenient / benefiting the employer. Thus, an employer cannot deduct an employee’s wage for a mistake if the deduction reduces their wage to below the federal minimum wage.

However, deducting wages for mistakes is legal if the final earnings exceed the federal minimum wage after the deduction.

Common mistakes include acceptance of bad checks, damaged equipment, and cash register shortage.

Can an employer deduct wages for jury duty compensation in Georgia?

Yes, an employer may deduct the nominal fee received for jury duty from an employee’s wages. In Georgia, jury duty compensation varies by county and ranges between $5 and $50 per day.

Can an employee sue their employer for violating wage deduction laws in Georgia?

Yes, employees may file a complaint or a private lawsuit against their employer for violating wage deduction laws. Employers may also face criminal charges if they willfully violate the CCPA or the FLSA.

Employees willing to report a CCPA or FLSA violation may either contact the Wage and Hour Division at the US Department of Labor—who will file suit for them—or file a private lawsuit themselves.

Employees may recover unpaid wages and liquidated damages equivalent to back pay if the employer willfully violated wage deduction laws.

What is the statute of limitations for a wage deduction violation in Georgia?

Employees must file a suit for a wage deduction violation within two years of the violation. Federal law extends the deadline to three years in cases of willful violation by the employer.

Can an employer fire an employee for filing a complaint regarding a violation of wage deduction laws in Georgia?

No, an employer cannot fire or discriminate against an employee for filing a complaint or participating in legal proceedings under the FLSA or CCPA.

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