GARNISHMENTS IN NORTH CAROLINA

Wage garnishments are legal in North Carolina if a North Carolina court or federal court issues a court ordered garnishment for specific items such as, but not limited to, taxes, student loans, child and spouse support, and payment of ambulance services in certain North Carolina counties. The North Carolina Wage and Hour Act (WHA) recognizes legal garnishment court orders in N.C.G.S. 95-25.8(1): "An employer may withhold or divert any portion of an employee's wages when: (1) The employer is required or empowered to do so by State or federal law, ..."

Generally, wage garnishments by banks and loan institutes for car loans, credit card debt, and other personal debt items are not legal in North Carolina. However, there is an exception to this rule if the North Carolina employer of the employee in question has locations in both North Carolina and the state that the garnishment order was obtained in. If the employer has locations in the garnishment-state and in North Carolina and the employee works for the same employer, then it is our administrative position that the North Carolina location is, in effect, under the jurisdiction of the garnishment-state's courts, and is subject to that state's garnishment order for personal debt items. Please keep in mind that the garnishment order from the other state must have been placed on the same employer that the employee in question worked for in the other state and is now working for in North Carolina. For example, if the employee in question worked for a Wal-Mart store in the other state and a garnishment order was issued against that Wal-Mart store, and this employee now works for a Wal-Mart store here in North Carolina, then it is our administrative position that this other state's garnishment order would have jurisdiction over the Wal-Mart store here in North Carolina. But, on the other hand, if the employee in question worked for a Wal-Mart store in the other state and a garnishment order was issued against that Wal-Mart store, but this employee now works for a Target store here in North Carolina, then it is our administrative position that this other state's garnishment order would not have jurisdiction over the Target store here in North Carolina even if Target is also doing business in this other state since the garnishment order was issued against a different business.

The North Carolina Department of Labor (NCDOL) does not regulate how much an employer can deduct from an employee's wages for administrative costs that are allowed by a particular garnishment law. If a particular garnishment law allows administrative costs, then it should be spelled out in that law. For questions on deductions for garnishments and administrative costs for child support in North Carolina, you may call the North Carolina Department of Health and Human Services (DHHS) at 1-800-992-9457 (toll-free). Web site: http://www.dhhs.state.nc.us/

If a particular garnishment law is silent on the issue of deducting for administrative costs or an employer wants to take out more than allowed by law, then the employer would be required by the WHA to obtain written authorization from the affected employee pursuant to N.C.G.S. 95-25.8(2). Also, for the administrative costs that are not allowed by a particular garnishment law, the employer cannot bring the affected employee below the minimum wage for the first 40 hours worked in a workweek and the employer cannot deduct at all from the time and one-half overtime pay for all hours worked in excess of 40 in a workweek. Each workweek stands on its own for minimum wage and overtime pay purposes.

Please review on-line our fact sheet on Deductions from Wages for details on deductions from and withholding of wages.

There is also a federal law as to how much can be deducted from an employee's wages for court ordered garnishments. For information on this law, you need to contact the United States Department of Labor's Wage and Hour Division office in either Charlotte (704) 749-3360 or Raleigh (919) 790-2741. Web site: http://www.dol.gov/

The NCDOL does not administer garnishment laws as to the content of a legal court order. You will have to consult with a private attorney if you have further questions or questions on garnishment laws as to their legality. If you do not have an attorney or know of one to contact, you may call the North Carolina Lawyer Referral Service at 1-800-662-7660 (toll-free) and they will refer you to an attorney. Web site: http://www.abanet.org/referral If you cannot afford an attorney, you may be eligible for free legal advice thru a Legal Aid Services office in your area. Contact their Central Office in Raleigh at (919) 856-2564 for information on local offices throughout the State. Web site: http://www.lsnc.org/

North Carolina Department of Labor
Wage and Hour Bureau
1101 Mail Service Center
Raleigh, NC 27699-1101
(919) 807-2796 or (toll-free NC only) 1-800-NC-LABOR
Web site:  http://www.nclabor.com
 

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