Goto Section: 1.1935 | 1.1940 | Table of Contents
FCC 1.1936
Revised as of October 2, 2015
Goto Year:2014 |
2016
§ 1.1936 Administrative wage garnishment.
(a) Purpose. This section provides procedures for the Commission to collect
money from a debtor's disposable pay by means of administrative wage
garnishment to satisfy delinquent non-tax debt owed to the United States.
(b) Scope. (1) This section applies to Commission-administered programs that
give rise to a delinquent nontax debt owed to the United States and to the
Commission's pursuit of recovery of such debt.
(2) This section shall apply notwithstanding any provision of State law.
(3) Nothing in this section precludes the compromise of a debt or the
suspension or termination of collection action in accordance with applicable
law. See, for example, the Federal Claims Collection Standards (FCCS), 31
CFR parts 900 through 904.
(4) The receipt of payments pursuant to this section does not preclude the
Commission from pursuing other debt collection remedies, including the
offset of Federal payments to satisfy delinquent nontax debt owed to the
United States. The Commission may pursue such debt collection remedies
separately or in conjunction with administrative wage garnishment.
(5) This section does not apply to the collection of delinquent nontax debt
owed to the Commission from the wages of Federal employees from their
Federal employment. Federal pay is subject to the Federal salary offset
procedures set forth in 5 U.S.C. 5514, § § 1.1925 through 1.1935, and other
applicable laws.
(6) Nothing in this section requires the Commission to duplicate notices or
administrative proceedings required by contract or other laws or
regulations.
(c) Definitions. In addition to the definitions set forth in § 1.1901 as used
in this section, the following definitions shall apply:
(1) Business day means Monday through Friday. For purposes of computation,
the last day of the period will be included unless it is a Federal legal
holiday.
(2) Certificate of service means a certificate signed by a Commission
official indicating the nature of the document to which it pertains, the
date of mailing of the document, and to whom the document is being sent.
(3) Day means calendar day. For purposes of computation, the last day of the
period will be included unless it is a Saturday, a Sunday, or a Federal
legal holiday.
(4) Disposable pay means that part of the debtor's compensation (including,
but not limited to, salary, bonuses, commissions, and vacation pay) from an
employer remaining after the deduction of health insurance premiums and any
amounts required by law to be withheld.
(5) Amounts required by law to be withheld include amounts for deductions
such as social security taxes and withholding taxes, but do not include any
amount withheld pursuant to a court order.
(6) Employer means a person or entity that employs the services of others
and that pays their wages or salaries. The term employer includes, but is
not limited to, State and local Governments, but does not include an agency
of the Federal Government.
(7) Garnishment means the process of withholding amounts from an employee's
disposable pay and the paying of those amounts to a creditor in satisfaction
of a withholding order.
(8) Withholding order means any order for withholding or garnishment of pay
issued by an agency, or judicial or administrative body. For purposes of
this section, the terms “wage garnishment order” and “garnishment order”
have the same meaning as “withholding order.”
(d) General rule. Whenever the Commission determines that a delinquent debt
is owed by an individual, the Commission may initiate proceedings
administratively to garnish the wages of the delinquent debtor as governed
by procedures prescribed by 31 CFR 285. Wage garnishment will usually be
performed for the Commission by the Treasury as part of the debt collection
processes for Commission debts referred to Treasury for further collection
action.
(e) Notice requirements. (1) At least 30 days before the initiation of
garnishment proceedings, the Commission shall mail, by first class mail, to
the debtor's last known address a written notice informing the debtor of:
(i) The nature and amount of the debt;
(ii) The intention of the Commission to initiate proceedings to collect the
debt through deductions from pay until the debt and all accumulated
interest, penalties and administrative costs are paid in full; and
(iii) An explanation of the debtor's rights, including those set forth in
paragraph (e)(2) of this section, and the time frame within which the debtor
may exercise his or her rights.
(2) The debtor shall be afforded the opportunity:
(i) To inspect and copy agency records related to the debt;
(ii) To enter into a written repayment agreement with the Commission under
terms agreeable to the Commission; and
(iii) For a hearing in accordance with paragraph (f) of this section
concerning the existence or the amount of the debt or the terms of the
proposed repayment schedule under the garnishment order. However, the debtor
is not entitled to a hearing concerning the terms of the proposed repayment
schedule if these terms have been established by written agreement under
paragraph (e)(2)(ii) of this section.
(3) The Commission will keep a copy of a certificate of service indicating
the date of mailing of the notice. The certificate of service may be
retained electronically so long as the manner of retention is sufficient for
evidentiary purposes.
(f) Hearing. Pursuant to 31 CFR 285.11(f)(1), the Commission hereby adopts
by reference the hearing procedures of 31 CFR 285.11(f).
(g) Wage garnishment order. (1) Unless the Commission receives information
that the Commission believes justifies a delay or cancellation of the
withholding order, the Commission will send, by first class mail, a
withholding order to the debtor's employer within 30 days after the debtor
fails to make a timely request for a hearing (i.e., within 15 business days
after the mailing of the notice described in paragraph (e)(1) of this
section), or, if a timely request for a hearing is made by the debtor,
within 30 days after a final decision is made by the Commission to proceed
with garnishment, or as soon as reasonably possible thereafter.
(2) The withholding order sent to the employer under paragraph (g)(1) of
this section shall be in a form prescribed by the Secretary of the Treasury
on the Commission's letterhead and signed by the head of the Commission or
his/her delegate. The order shall contain only the information necessary for
the employer to comply with the withholding order, including the debtor's
name, address, and social security number, as well as instructions for
withholding and information as to where payments should be sent.
(3) The Commission will keep a copy of a certificate of service indicating
the date of mailing of the order. The certificate of service may be retained
electronically so long as the manner of retention is sufficient for
evidentiary purposes.
(h) Certification by employer. Along with the withholding order, the
Commission shall send to the employer a certification in a form prescribed
by the Secretary of the Treasury. The employer shall complete and return the
certification to the Commission within the time frame prescribed in the
instructions to the form addressing matters such as information about the
debtor's employment status and disposable pay available for withholding.
(i) Amounts withheld. (1) After receipt of the garnishment order issued
under this section, the employer shall deduct from all disposable pay paid
to the applicable debtor during each pay period the amount of garnishment
described in paragraph (i)(2) of this section.
(2) Subject to the provisions of paragraphs (i)(3) and (i)(4) of this
section, the amount of garnishment shall be the lesser of:
(i) The amount indicated on the garnishment order up to 15% of the debtor's
disposable pay; or
(ii) The amount set forth in 15 U.S.C. 1673(a)(2) (Restriction on
Garnishment). The amount set forth at 15 U.S.C. 1673(a)(2) is the amount by
which a debtor's disposable pay exceeds an amount equivalent to thirty times
the minimum wage. See 29 CFR 870.10.
(3) When a debtor's pay is subject to withholding orders with priority the
following shall apply:
(i) Unless otherwise provided by Federal law, withholding orders issued
under this section shall be paid in the amounts set forth under paragraph
(i)(2) of this section and shall have priority over other withholding orders
which are served later in time. Notwithstanding the foregoing, withholding
orders for family support shall have priority over withholding orders issued
under this section.
(ii) If amounts are being withheld from a debtor's pay pursuant to a
withholding order served on an employer before a withholding order issued
pursuant to this section, or if a withholding order for family support is
served on an employer at any time, the amounts withheld pursuant to the
withholding order issued under this section shall be the lesser of:
(A) The amount calculated under paragraph (i)(2) of this section, or
(B) An amount equal to 25% of the debtor's disposable pay less the amount(s)
withheld under the withholding order(s) with priority.
(iii) If a debtor owes more than one debt to the Commission, the Commission
may issue multiple withholding orders provided that the total amount
garnished from the debtor's pay for such orders does not exceed the amount
set forth in paragraph (i)(2) of this section. For purposes of this
paragraph (i)(3)(iii), the term agency refers to the Commission that is owed
the debt.
(4) An amount greater than that set forth in paragraphs (i)(2) and (i)(3) of
this section may be withheld upon the written consent of debtor.
(5) The employer shall promptly pay to the Commission all amounts withheld
in accordance with the withholding order issued pursuant to this section.
(6) An employer shall not be required to vary its normal pay and
disbursement cycles in order to comply with the withholding order.
(7) Any assignment or allotment by an employee of his earnings shall be void
to the extent it interferes with or prohibits execution of the withholding
order issued under this section, except for any assignment or allotment made
pursuant to a family support judgment or order.
(8) The employer shall withhold the appropriate amount from the debtor's
wages for each pay period until the employer receives notification from the
Commission to discontinue wage withholding. The garnishment order shall
indicate a reasonable period of time within which the employer is required
to commence wage withholding.
(j) Exclusions from garnishment. The Commission may not garnish the wages of
a debtor who it knows has been involuntarily separated from employment until
the debtor has been reemployed continuously for at least 12 months. The
debtor has the burden of informing the Commission of the circumstances
surrounding an involuntary separation from employment.
(k) Financial hardship. (1) A debtor whose wages are subject to a wage
withholding order under this section, may, at any time, request a review by
the Commission of the amount garnished, based on materially changed
circumstances such as disability, divorce, or catastrophic illness which
result in demonstrated financial hardship.
(2) A debtor requesting a review under paragraph (k)(1) of this section
shall submit the basis for claiming that the current amount of garnishment
results in demonstrated financial hardship to the debtor, along with
supporting documentation. The Commission will consider any information
submitted; however, demonstrated financial hardship must be based on
financial records that include Federal and state tax returns, affidavits
executed under the pain and penalty of perjury, and, in the case of
business-related financial hardship (e.g., the debtor is a partner or member
of a business-agency relationship) full financial statements (audited and/or
submitted under oath) in accordance with procedures and standards
established by the Commission.
(3) If a financial hardship is found, the Commission will downwardly adjust,
by an amount and for a period of time agreeable to the Commission, the
amount garnisheed to reflect the debtor's financial condition. The
Commission will notify the employer of any adjustments to the amounts to be
withheld.
(l) Ending garnishment. (1) Once the Commission has fully recovered the
amounts owed by the debtor, including interest, penalties, and
administrative costs consistent with the FCCS, the Commission will send the
debtor's employer notification to discontinue wage withholding.
(2) At least annually, the Commission shall review its debtors' accounts to
ensure that garnishment has been terminated for accounts that have been paid
in full.
(m) Actions prohibited by the employer. An employer may not discharge,
refuse to employ, or take disciplinary action against the debtor due to the
issuance of a withholding order under this section.
(n) Refunds. (1) If a hearing official, at a hearing held pursuant to
paragraph (f)(3) of this section, determines that a debt is not legally due
and owing to the United States, the Commission shall promptly refund any
amount collected by means of administrative wage garnishment.
(2) Unless required by Federal law or contract, refunds under this section
shall not bear interest.
(o) Right of action. The Commission may sue any employer for any amount that
the employer fails to withhold from wages owed and payable to an employee in
accordance with paragraphs (g) and (i) of this section. However, a suit may
not be filed before the termination of the collection action involving a
particular debtor, unless earlier filing is necessary to avoid expiration of
any applicable statute of limitations period. For purposes of this section,
“termination of the collection action” occurs when the Commission has
terminated collection action in accordance with the FCCS or other applicable
standards. In any event, termination of the collection action will have been
deemed to occur if the Commission has not received any payments to satisfy
the debt from the particular debtor whose wages were subject to garnishment,
in whole or in part, for a period of one (1) year.
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Goto Section: 1.1935 | 1.1940
Goto Year: 2014 |
2016
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