For decades, individuals working in the District have suffered the sudden and destabilizing effects of wage garnishment, a legal process used by creditors to force a person’s employer to divert a portion of their paycheck every pay period to pay down a civil money judgment. Because of the District’s severely outdated law, garnishment from these judgments – often the result of years-old debt collection lawsuits involving credit cards or consumer loans, housing-related debt, or medical bills – has historically caused workers in the District to see up to 25% of every paycheck disappear, with little to no notice. This wreaks havoc on their ability to make the rent, pay for food, and cover other basic necessities, as pay period after pay period, portions of their paychecks are taken away.
But starting today, excessive wage garnishments are officially a thing of the past for many low- and moderate-income workers, thanks to the Wage Garnishment Fairness Amendment Act, which is now in effect. The law provides a slew of new restrictions and requirements to broadly protect wage earners from surprise garnishments, increases the number of workers who are fully protected from garnishment, and dramatically reduces the amount of money that can be taken from those earning above the no-garnishment threshold.
Wage garnishment reform in the District is the result of a years-long advocacy effort by Legal Aid and other community partners. Our advocacy highlighted the harmful impacts of wage garnishment on our client community, the kinds of illegal debt collection practices that can lead to such garnishments, and the insufficiency of the District’s then-outdated garnishment limits. DC’s prior wage garnishment law, which dated back to 1971, based its garnishment calculations on the federal minimum wage (just $7.25 per hour, unchanged since 2009), resulting in large and debilitating garnishments. The new law makes a number of key changes, including:
- Tying the District’s garnishment formula to DC’s minimum wage (currently $14 per hour, increasing to $15 per hour in 2020, and increasing annually with inflation thereafter), rather than the federal minimum wage;
- Providing complete protection against garnishment for workers earning up to 40 times the DC minimum wage each week, and permitting a gradually increasing percentage of wages to be garnished for workers earning more;
- Allowing workers facing financial hardship due to garnishment to ask the court for relief based on their particular circumstances; and
- Requiring that all workers get advance notice before their wages are garnished, so that a reduced paycheck will no longer be an individual’s first notice of garnishment.
We applaud the DC Council, particularly Councilmembers Elissa Silverman and Charles Allen, for creating a fairer wage garnishment law for District workers. With this law going into effect, the District has taken a major step forward in the fight to protect low- and moderate-income individuals and families from the destabilizing impacts of aggressive debt collection.