New Jersey Child Support Garnishment Limits, Exemptions and Protections

While failing to enforce New Jersey child support garnishment can lead to fines and civil suits, the employer may not demote, refuse to hire, or terminate an employee on the basis of a support order. The noncustodial parent is protected from this type of discrimination by New Jersey law, and the employer could be liable for double damages if they discriminate. Further, the Consumer Credit Protection Act (CCPA) gives some protection to the noncustodial parent’s income by limiting the amount of their earnings that are subject to child support garnishment.

Garnishment Limits and Exemptions

New Jersey follows the Consumer Credit Protection Act (CCPA) when determining a noncustodial parent’s wage garnishment limits. To determine the portion of the noncustodial parent’s earnings that are subject to these limits, the employer should first subtract all of the legally required deductions from the employee’s wages. Legally required deductions are limited to income taxes, Social Security and Medicare taxes, mandatory state disability or unemployment insurance, mandatory state pension contributions for public-sector employees, and mandatory contributions under the Railroad Retirement Act. All other deductions made from the noncustodial parent’s wages will be considered voluntary for the purpose of child support withholding.

Once the legally required deductions are made, the noncustodial parent’s “disposable earnings” remain. These disposable earnings are subject to the following maximum withholding limits under New Jersey law and the CCPA:

• 50% if the employee supports a second family;
• 55% if the employee supports a second family and owes more than twelve weeks of back support;
• 60% if the employee does not support a second family; and
• 65% if the employee does not support a second family and does not owe more than twelve weeks of back support.

When an employee is subject to more than one order, and the maximum applicable percentage for each differs, the higher of the percentages should be applied to both orders.

Allocation and Priority

When an employee is assigned to more than one support order and does not have enough allowable disposable earnings to make all payments, the employer should allocate the current support payments first. After current support, New Jersey law is unclear as to which is prioritized next between medical support payments and arrears. Unless directed to do otherwise, after deducting for current support, the employer should withhold for arrears, then for medical payments if there are any allowable disposable earnings left. The employer should use the pro rata method when allocating allowable disposable earnings for support payment. The pro rata method is based on the ratio that the support payment takes out of the total disposable earnings.

When an employer receives both an order for support and another type of withholding order, the employer should usually withhold for the support order first, even if the other withholding order was issued before the support order. Support orders take priority over any other state-issued withholding order. As of October 17, 2005, they also take priority over any Chapter 13 bankruptcy repayment order. IRS levies, however, always take priority over an order for support. When an employer receives an IRS levy for an employee subject to a support order, and their employee does not have enough disposable earnings to make both payments, the employer should contact the IRS agent listed on the levy. In recognition of the social importance of support payments, the IRS may allow for an accommodation of the support order in favor of the levy. If the IRS agent agrees to this, the New Jersey employer should get the agreement in writing. Furthermore, the employer should also be sure to contact the agency issuing the support order to inform the agency about the levy.

Protection from Discrimination

If an employer discriminates against an employee or a potential employee on the basis of a support order, they may be liable for double compensatory damages, reinstatement of employment, and reasonable attorneys’ fees. However, attorneys’ fees may not be awarded in New Jersey unless the court determines that the action was brought in bad faith. The employer may also be subject to a fine, to be determined by the court.