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Oregon Advisory Opinions January 01, 1979: OP 7696

⤴ Up to Oregon Advisory Opinions

Collection: Oregon Attorney General Opinions
Date: Jan. 1, 1979

Advisory Opinion Text

No. 7696 January 2,1979 Mr. H.S. Coulter State Highway Engineer Highway Division Department of Transportation QUESTION PRESENTED

If an employe's wages are subject both to a court-ordered wage assignment under ORS 23.777 or 23.783 for child or spousal support, and to a wage garnishment, in determining the amount, if any, available for garnishment, is the amount paid under the wage assignment sub­tracted from aggregate disposa­ble earnings before computation of the amount subject to gar­nishment, or is it subtracted from the amount otherwise sub­ject to garnishment after compu­tation of that amount?

ANSWER GIVEN

It is subtracted from the amount otherwise subject to garnishment after computation of that amount.

DISCUSSION

In 39 Op Atty Gen 391 (1978), we held that wage assignments for child support issued pursuant to ORS 23.777 are not subject to the limitations on garnishment imposed by ORS 23.185(l)(a) and (b). Our opinion dealt with wage assign­ments and not with garnishments, and only mentioned in passing the amount which would remain avail­able for a garnishment after pay­ment under a wage assignment order. We consider the computation of that amount in this opinion.

ORS 23.185(1) provides:

"Except as provided in subsection (2) of this section, the maximum part of the aggre­gate disposable earnings of an individual for any workweek that is subjected to garnish­ment may not exceed:

"(a) 25 percent of his disposable earn­ings for that week;

"(b) The amount by which his disposa­ble earnings for that week exceed 40 times the applicable federal minimum hourly wage prescribed by section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206) as that section is in effect on March 31, 1975; or "(c) The amount described in paragraph (a) or (b) of this subsection, minus any amount required to be withheld from his disposable earnings for that week pursuant to an order issued under ORS 23.777 or 23.783, "whichever amount is less" (Emphasis added).

We first note that the quoted statute has nothing to do with com­putation of the amount which may be payable under a wage assign­ment order. It relates solely to gar­nishment, which is an entirely dif­ferent procedure. ORS 23.185(1) is applicable after payment or setting aside of amounts covered by the wage assignment.

The first step in determining the amount available for garnishment is the determination of disposable earnings, defined by ORS 23.175(a) as ". . . that part of the earnings of an indi­vidual remaining after the deduction from those earnings of any amounts required to be withheld by law."

It seems clear that the amount of a wage assignment is not deducted in determining disposable earnings, since that amount is deducted un­der ORS 23.185(l)(c) at a later stage in the computation. The same result is reached under 15 USC sec 1672(b), an almost identical federal definition of disposable earnings. First Nat. Bank v. Hasty, 415 F Supp 170 (ED Mich 1976), aff'd, 573 F2d 1310 (6th Cir 1977); Marshall v. District Court, 444 F Supp 1110, 1115 (ED Mich 1978). Thus we begin with gross earnings minus income tax, FICA and other statutory withholdings, without deducting (at this point) the amount of any wage assignment under ORS 23.777 or 23.783.

The next step is an alternative computation under ORS 23.185(l)(a) and (b). The amount subject to garnishment (unless there has been a wage assignment under ORS 23.777 or 23.783) will be the smaller amount produced by these computations. Under para­graph (a), the maximum amount subject to garnishment is 25 per­cent of disposable earnings for that week. Under paragraph (b), the maximum amount subject to gar­nishment is the excess of disposable earnings for the week, over 40 times the hourly minimum wage applicable under 1975 federal law. That non-garnishable minimum amount is $92 per week. Thus, if an employe has disposable earnings of $100 the garnishable amount is $8 computed under paragraph (b), rather than $25 computed under paragraph (a); for $120, it would be $28 computed under paragraph (b), rather than $30 computed under paragraph (a); and for $140, it would be $35 computed under para­graph (a), rather than $48 comput­ed under paragraph (b).

This ends the matter for an employe who is not subject to a wage assignment order under ORS 23.777 or 23.783; the amount com­puted under paragraph (a) or (b), whichever is less, is subject to gar­nishment. But if such a wage as­signment order exists, a third alter­native becomes applicable under paragraph (c). The amount subject to garnishment in such a case is the amount computed under (a) or (b), whichever is less, minus the full amount of the wage assignment.

It can readily be seen that if the wage assignment is for the full 25 percent of disposable income au­thorized under ORS 23.777(1), or for a greater percentage under ORS 23.777(3) or 23.783, there will be nothing left subject to garnishment. The wage assignment will always take the full amount which would have been subject to garnishment, or more, leaving no earnings sub­ject to garnishment. However, the wage assignment order may also be for a fixed amount. Assume the order is for payment (for example) of $25 per week, but not more than 25 percent of disposable earnings. An employe with disposable earn­ings of $100 for a week would not be subject to garnishment after payment of the $25 wage assign­ment, since subtraction of $25 from the $8 amount computed under ORS 23.185(l)(b) leaves a negative amount. Disposable earnings of $120 would leave $3 subject to gar­nishment ($28 computed under paragraph (b), minus $25); disposa­ble earnings of $140 would leave $10 subject to garnishment ($35 computed under paragraph (a), minus $25).

In short, as we stated in our previous opinion, ORS 23.185(1) does not affect the amount payable pursuant to a wage assignment under ORS 23.777. However, if such a wage assignment does exist, it must be considered in computing the amount subject to garnishment under ORS 23.185(1). That compu­tation is first made alternatively under paragraphs (l)(a) and (b), disregarding the amount of the assignment. Finally, the amount of the assignment is subtracted from the smaller of the two amounts computed under (l)(a) and (l)(b). If the amount of the wage assignment is less than the smaller of those two amounts, the difference is subject to garnishment.

JAMES A. REDDEN Attorney General

JAR:BS

In 39 Op Atty Gen 391 (1978), we inadvert­ently omitted a reference to a federal limita­tion imposed by 15 USC sec 1673(b)(2) and (c), on the amount of wages subject to gar­nishment or court-ordered wage assignment for a support obligation. The limitation would ordinarily exceed the amount of the wage assignment, but should be considered in any case in which an order assigning more than 25 percent of wages is sought or has been granted under ORS 23.777(3) or 23.783.

29 USC sec 206(a)(1), as in effect on March 31, 1975, provided for a minimum wage of

". . . not less than $2.10 an hour during the year beginning January 1, 1975, and not less than $2.30 an hour after December 31, 1975, except as otherwise provided in this section;"

The $92 figure is 40 times $2.30.

It may be urged that the proper figure is 40 times $2.10 or $84, since the minimum wage applicable in 1975 was $2.10 per hour. How­ever it is clear that ORS 23.185(l)(b) meant to adopt as its governing figure the mini­mum wage under the section as in effect for any particular time, rather than a particular minimum wage applicable on a particular date. It did not adopt "the hourly minimum wage applicable under [the statute] on March 31, 1975," but the "applicable hourly minimum wage [whatever it might be] prescribed by [the statute] as that section is in effect on March 31, 1975." The January 1, 1976 increase prescribed by the Federal statute as effective on March 31, 1975 is therefore incorporated in the Oregon statute.

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