Colorado Child Support Garnishment Limits, Exemptions and Protections
Colorado wage garnishment law protects the noncustodial parent from employer discrimination, and also protects their income from being completely depleted through the use of garnishment limits. If an employer discriminates on the basis of a support order, Colorado allows the employee to bring a civil action against them to collect for any damages incurred by the employee. Further, if an employee is subject to multiple withholding orders, the employer is responsible for allocating these orders within specified garnishment limits. While enforcement of child support garnishment is taken very seriously in Colorado, any violations of the garnishment limits or other rights of the noncustodial parent are also not taken lightly. The rights of noncustodial parents are explained in further detail below.
Garnishment Limits and Exemptions
Colorado strictly follows the provisions of the Consumer Credit Protection Act (CCPA) when determining the portion of the noncustodial parent’s wages that are protected by garnishment limits. To find the protected income, the employer must first subtract the legally required deductions from the employee’s gross wages. The CCPA limits these deductions to the following: federal, state and local taxes; mandatory state disability, unemployment, or pension plan programs (for public sector employees); Social Security and Medicare taxes, and any deductions required by the Railroad Retirement Act. After these deductions are made, the remaining income is referred to as the employee’s “disposable earnings,” which are then subject to the maximum garnishment limits. The CCPA and Colorado maximum garnishment limits are as follows:
- 50% if the employee supports a second family;
- 55% if the employee supports a second family and owes more than twelve weeks of past-due 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 past-due support.
When served with an order from out of state, the employer should remember that the Uniform Interstate Family Support Act (UIFSA, adopted by Colorado) mandates that the employer follow the laws of the employee’s work state when determining the withholding limits.
Allocation and Priority
When an employee has multiple orders and not have enough allowable disposable earnings to make all payments, the employer must allocate the orders by priority of support due. The priority is as follows: current monthly support and maintenance (when maintenance is included in the child support order); medical support that states a specified amount (not including health insurance premiums); arrears or retroactive debts; and lastly, orders that are for maintenance only. The payments should be allocated using the pro rata method, which is based on the ratio that each payment holds of the total allowable disposable earnings.
If the employer receives two or more support orders that list different maximum percentages, the employer should use the highest maximum percentage stated for all orders. When the employee is assigned an order of support as well as another type of state-issued withholding order, and does not have enough allowable disposable earnings to make all payments, the employer should withhold for the order of support first. This rule also applies to all Chapter 13 bankruptcy repayment orders issued on or after October 17th, 2005. It does not matter whether the support order or the other withholding order was issued first – the support order must be prioritized first.
However, when an employee has been assigned an IRS-issued levy, the IRS levy takes priority and must be withheld first. In this situation, the employer may contact the IRS agent listed on the levy about accommodating the support order. The IRS is typically sensitive to the need for support orders and thus will often make an accommodation. But if the IRS does agree to accommodate the order, the employer should make sure to get any agreement in writing. The employer should also be sure to contact the agency or court that issued the support order to notify them about the tax levy.
Protection from Discrimination
A Colorado employer is prohibited by law from discriminating against an employee on the basis of a support order. This means that an employer may not refuse to hire, discharge, demote, or otherwise discriminate against the employee because of the employee’s support order. If the employer is found to have violated this law, they may be held in contempt of court and be subject to a fine. Additionally, within ninety days of the violation, the employee may bring a civil action against the employer for reinstatement, up to six weeks’ of lost wages, and reasonable costs and attorneys’ fees.