Wage Garnishment Trends Among U.S. Workers

09.19.2014
HR & Safety

Study finds manufacturing sector has highest percentage of firms with garnished employees

On Sept. 15, payroll services and human resources management firm ADP, revealed findings from a first-of-its-kind study on current trends in U.S. wage garnishments. The study, conducted by ADP Research Institute, found that 7.2% of U.S. workers studied have had their wages garnished. The investigation also identifies the primary reasons for garnishments, or debt recovery through pay seizures.

  • Over 40% of all garnishments are for child support
  • Tax debts account for nearly 20%

Wage garnishments can have a significant impact on both employees and employers, according to the study. Employees who have their wages garnished can find it humiliating and stressful, often resulting in decreased workplace productivity and motivation.

Employers may be exposed to financial risk when their employees’ wages are garnished by becoming liable to creditors for an employee judgment if they do not assist with the garnishment appropriately. A lack of data about current trends in U.S. wage garnishments led the ADP Research Institute to analyze aggregated, anonymous payroll data from 2013 comprising 13 million employees age 16 and older.

The study found that the manufacturing sector has the highest percentage of employee garnishments, with 48% ofcompanies reporting one or more employees’ wages garnished, followed by the transportation and utilities industry at 42% of companies with at least one employee garnishment. Companies in the professional and business services, financial activities, and education and health services industries have the lowest rate at 23% of companies in each segment.

This disparity suggests a possible relationship between garnishment and blue- and white-collar job categories.

More findings:

  • The highest garnishment rate is 10.5% among employees age 35 to 44, which is typically the age of peak debt load, child rearing, and divorce.
  • Garnishment rates are highest among those earning $25,000″$39,999 per year with 10% of these workers having their wages garnished.
  • For nearly all categories of garnishments, the rates are similar for men and women with the exception of child support: 5.8% of male workers versus only 0.6% of females.
  • The Midwest has the highest garnishment rate at 8.9% of employees, compared to the Northeast, which has the lowest rate at 4.9%. This disparity may be related to a higher concentration of manufacturing companies being located in the Midwest.

Obtain a free copy of the ADP Research Institute white paper that outlines the study’s key findings.

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