A rare and interesting thing in the world of federal garnishment law has just occurred: the U.S. Department of Labor’s Wage and Hour Division (WHD) updated its published position concerning the meaning of “earnings” pursuant to the Consumer Credit Protection Act (CCPA). This is important because the Department of Labor has issued very little regulation interpreting the CCPA and none define what the CCPA means by “earnings.” And, while there are several opinion letters from the years directly after the CCPA was adopted, only one such letter has been issued since 1972. Keep in mind that the federal decision concerning what is or is not CCPA-earnings (such as disability payments, tips and lump sum bonus payments, which are addressed herein) is critical because if the funds are not CCPA-protected earnings then states decide whether to garnish those funds and how much, if any, of those funds to protect from garnishment.
Fact Sheet No. 30
The WHD attempted to provide clarity as the meaning of “earnings” with its update to Fact Sheet No. 30: The Federal Wage Garnishment Law, Consumer Credit Protection Act’s Title III. The updates became effective in November of 2016.
The WHD mostly reformatted this document. In assembling preexisting information into a new section entitled, “Definition of Earnings,” the WHD added two new statements of its position. First, the fact sheet now states that “[e]arnings may include payments received in lump sums.” This position differs little from the longstanding position taken in other WHD internal documents. But, the new statement about lump sum payments being CCPA earnings may matter not because it is contradicted by the last administrative WHD opinion letter. That 2005 letter followed the Supreme Court opinion in...
