When a sheriff or marshal serves an earnings withholding order, the employer becomes part of someone else’s collection case. Code of Civil Procedure section 706.154 lets the creditor sue an employer that fails “to withhold or to pay over the amount the employer is required to withhold.” And Labor Code section 2929 bars firing an employee over one garnishment. Getting the paperwork right protects the company on both sides.
What does an employer have to do after being served?
Two things right away, and then withhold every pay period until the order ends.
Section 706.104 sets out the first steps. The employer must give the employee a copy of the order and the accompanying forms “within 10 days from the date of service.” It must also “Complete the employer’s return on the form provided by the levying officer and mail it” to the levying officer “within 15 days from the date of service.”
The return is where most employers make their first mistake, usually by ignoring it. If the person no longer works there, or another garnishment is already in place, the return says so. The statute requires an employer whose order is ineffective to “state in the employer’s return that the order will not be complied with for this reason.”
Withholding begins later. Under section 706.022, as amended effective January 1, 2026, the “withholding period” generally “commences on the 30th day after service” on the employer. From then on, the employer “shall withhold the amounts required by an earnings withholding order from all earnings of the employee payable for any pay period of the employee which ends during the withholding period.” The period runs until the debt is paid or the employer receives a court order or a levying officer’s notice ending it.
How much can the company take out of each paycheck?
Less than many payroll systems assume.
For an ordinary creditor’s judgment, section 706.050 caps the weekly levy at the lesser of two numbers: “Twenty percent of the individual’s disposable earnings for that week,” or “Forty percent of the amount by which the individual’s disposable earnings for that week exceed 48 times the state minimum hourly wage.” When the employee works somewhere with a higher local minimum wage, the statute says the local rate “shall be used for the calculation.” Employers with workers in several cities need payroll settings keyed to where each employee actually works.
Withholding orders for support and for taxes are handled under separate sections of the same chapter, and payroll should route them to whoever handles those orders instead of applying the ordinary creditor formula.
The employer is allowed one small charge. Section 706.034 says the employer “may deduct from the earnings of the employee the sum of one dollar and fifty cents ($1.50) for each payment made” under the order. Anything beyond that, such as an administrative fee in the handbook, runs into the Labor Code’s limits on deductions from wages.
What if two garnishments arrive for the same employee?
The first one usually controls.
Under section 706.023, “An employer shall comply with the first earnings withholding order served upon the employer.” A later ordinary order served while the first is in effect “is ineffective and the employer shall not withhold earnings pursuant to the subsequent order.” The exceptions are orders for support, for taxes, and for elder or dependent adult financial abuse, which have their own priority rules in the same section.
Payroll teams sometimes withhold under both orders to be safe. That’s the wrong instinct. Over-withholding takes wages the employee is entitled to and creates a wage claim against the employer.
Can we fire an employee whose wages are garnished?
Not because of a single garnishment.
Labor Code section 2929 states: “No employer may discharge any employee by reason of the fact that his wages have been subjected to garnishment for the payment of one judgment.” It also bars firing an employee because a garnishment “has been threatened,” and it voids any employment contract term that gives less protection. Federal law has a parallel rule. 15 U.S.C. § 1674 says no employer may discharge an employee because “his earnings have been subjected to garnishment for any one indebtedness,” and a willful violation is a federal crime.
The California statute provides a specific wage remedy for a discharge that violates it, and it adds that “Nothing in this section affects any other rights the employee may have against his employer.” That sentence leaves room for a wrongful termination claim alongside the statutory one.
The text protects against discharge over one judgment. A second garnishment doesn’t automatically make termination safe. If the stated reason for firing is the garnishments themselves, a jury will hear about the employee’s debts and the company’s reaction to them, and that’s rarely a good look. A performance-based termination of an employee who happens to have a garnishment needs the same documentation as any other, and the timing will be examined.
| Situation | Rule | Employer exposure |
|---|---|---|
| Order served but not answered | Employer’s return due within 15 days of service (CCP § 706.104) | Contempt risk, and the creditor’s collection effort turns toward the employer |
| No withholding during the withholding period | Employer must withhold from every covered pay period (CCP § 706.022) | Creditor’s suit for the amount that should have been withheld (CCP § 706.154) |
| Withholding over the cap | Levy limited by CCP § 706.050 unless another rule applies | Wage claim for the excess, with possible waiting time penalties at termination |
| Second ordinary order while the first is active | Second order is ineffective (CCP § 706.023) | Wage claim for amounts wrongly withheld |
| Termination over one judgment | Barred by Lab. Code § 2929 and 15 U.S.C. § 1674 | Statutory wage remedy, wrongful termination claim, federal criminal exposure if willful |
Does following the order protect the company?
Yes, if the company follows the order as written.
Section 706.154 gives employers a safe harbor. An employer that complies with a written order or notice that “purports to be given or served in accordance with the provisions of this chapter is not subject to any civil or criminal liability for such compliance unless the employer has actively participated in a fraud.” An employee who disputes the debt has to raise it with the court or the levying officer, through the claim of exemption process, not with HR.
That safe harbor is the reason to stay neutral. HR’s job is to process the paperwork, deliver the forms, and answer questions about the mechanics. Commenting on the underlying debt or pressuring the employee to settle it creates evidence the company doesn’t need.
Steps to take once a garnishment-related claim arrives
- Put a litigation hold on the earnings withholding orders, employer’s returns, payroll registers showing each withholding, records of payments to the levying officer, and any emails or texts about the employee’s garnishment.
- Calendar the deadline on the demand letter, Labor Commissioner claim, or summons. Check for an arbitration agreement and an employment practices liability (EPLI) policy that requires prompt notice.
- Identify the payroll staff who processed the order and the managers involved in any discipline or termination, and stop any further action against the employee that could look like retaliation.
- Pull the documents that decide the claim: the dates of service and of each withholding, the disposable-earnings calculation for each pay period, and the termination paperwork if the employee was let go.
- Talk to a lawyer before responding, contacting the employee or the creditor’s lawyer, or offering anything to settle.
Garnishment claims are usually about arithmetic and timing. Experienced employment defense attorneys in California start by rebuilding the payroll record pay period by pay period, because that record usually shows which side has the numbers right.
FAQ
Do we have to tell the employee about the garnishment?
Yes. Section 706.104 requires the employer to deliver a copy of the earnings withholding order, the notice to the employee, and the exemption and financial statement forms within 10 days of service. If the person no longer works there and is owed no earnings, delivery isn’t required. Keep a record of how and when the forms were delivered.
What happens if we forget to withhold?
The judgment creditor can sue the employer under Code of Civil Procedure section 706.154 for the amount the employer should have withheld and paid over. Fix the payroll setting, and talk to counsel before trying to make up the shortfall through extra deductions from the employee’s later paychecks.
Can we charge the employee a processing fee for the garnishment?
Only the amount the statute allows. Code of Civil Procedure section 706.034 lets the employer deduct $1.50 for each payment made under an earnings withholding order. A larger processing fee isn’t authorized by the garnishment statute and could be challenged as an unlawful deduction from wages under the Labor Code.
Is it legal to fire an employee who has multiple garnishments?
Labor Code section 2929 and the federal Consumer Credit Protection Act protect against discharge over a garnishment for one judgment or one debt. Their text doesn’t extend to a second, but a termination explained by the employee’s debts invites scrutiny and other claims. Base any termination on documented job performance or conduct, and have counsel review the timing.
If a garnishment-related claim has been filed
If your company faces a creditor’s suit for failure to withhold or an employee’s claim that a termination was tied to a garnishment, the payroll records and the timeline of the order usually decide the case. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving wage garnishment and earnings withholding orders. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statutes are Code of Civil Procedure sections 706.022, 706.023, 706.034, 706.050, 706.104, and 706.154; Labor Code section 2929; and 15 U.S.C. § 1674.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.