Indiana Garnishment
Overview
Indiana employers must comply with garnishment orders. Child support is covered in a separate state summary: Indiana Child Support.
Coverage
All public and private employers are covered. This summary is restricted to coverage of private employers.
Effective July 1, 2016, a franchisor is not considered to be an employer or co-employer of a franchisee or its employees, unless the franchisor agrees in writing to assume that role.
Amount Subject to Withholding
Indiana law follows federal law in determining the amount of disposable earnings exempt from a garnishment order.
The amount of wages subject to garnishment may not exceed the lesser of 25 percent of the individual's weekly disposable earnings, unless the individual can show good cause why the amount should be reduced, in which case the amount may be less than 25 percent but at least 10 percent of the weekly disposable earnings, or the amount by which the worker's weekly disposable earnings exceed 30 times the federal minimum wage.
Earnings are defined as compensation for personal services and include wages, commissions, and periodic payments from pension or retirement programs. Disposable earnings are those remaining after deductions required by law.
Priority of Withholding Orders
Support withholding orders have priority over garnishment orders. Employers that receive a support withholding order and a garnishment order for the same person must honor the garnishment order only to the extent that disposable earnings withheld under the support withholding order do not exceed the maximum amount subject to garnishment.
Illegal Discharge of Employees
Employers may not discharge employees for wage garnishment.
Administration/Enforcement
Indiana courts enforce the law.
Employers may deduct an administrative fee of $12 or 3 percent of the total amount required to be withheld under a garnishment order or a series of orders for the same debt.
If employers impose an administrative fee, they can deduct half the fee directly from an employee's disposable earnings and the other half from the amount in the garnishment order due to the creditor.
Employers may collect the entire fee from one or more of the initial deductions or can collect ratably over the pay periods from which deductions are required.
A court clerk is not required to notify an employer to suspend the creditor garnishment after the judgment is satisfied. A request to suspend the garnishment must be submitted by the employee to the court that rendered the judgment.
Penalties/Remedies
Employees discharged for wage garnishment may sue their former employers for reinstatement and for recovery of up to six weeks' lost wages.
Reference Citations
Coverage: Ind. Code §24-4.5-1-301, Ind. Code §23-2-2.5-0.5
Amount Subject to Withholding: Ind. Code §§24-4.5-1-301, 24-4.5-5-105; H.B. 1347, L. 2014
Priority of Withholding Orders: Ind. Code §24-4.5-5-105
Illegal Discharge of Employees: Ind. Code §24-4.5-5-106
Administration/Enforcement: Ind. Code §24-4.5-5-105; Ind. H.B. 1347, L. 2014
Penalties/Remedies: Ind. Code §24-4.5-5-202
Web References
Indiana Laws:
Indiana Courts:
Related Information
Agency information: Indiana Supreme Court, 315 Indiana State House, Indianapolis, Ind. 46204; (317) 232-2540
1 | Page
Created: July 2017