1. Following The Money

The following is example text from a Garnishment Exemption Notice. For a formatted version, download the Garnishment Exemption Notice PDF or Garnishment Exemption. The differences between exempt employees and nonexempt employees can cause a lot of confusion for both. The following summary breaks down how the exemption.

Exempt Employees Certain types of employees, often classified as exempt employees, are not entitled to as guaranteed by the (FLSA). To add to that, most states have their own wage and hourly rate laws that have even more requirements in addition to the FLSA. The FLSA requires that employers must pay at least for up to 40 hours in a work week and overtime pay for any additional time unless the employee falls into an exception category. In addition to the Federal Act, many states have their own set of wage requirements, and laws and it is imperative that employers abide by both federal and state law to stay compliant.

If an employee is considered exempt (vs. non-exempt), their employer is not required to pay them overtime pay. It is at the employer’s discretion whether or not to pay for hours worked overtime.

Some employers might create an employee benefits package with extra perks in lieu of overtime pay. Non-Exempt Employees A non-exempt employee is entitled to overtime pay through the Fair Labor Standards Act (FLSA).

In addition, some states have expanded overtime pay guidelines. Check with your state Department of Labor website for rules in your location. Employers are required to pay time and a half the employee’s regular rate of pay when they work more than 40 hours in a given pay week.

Most employees must be paid the federal minimum wage ($7.25 in 2018) for regular time and at least time and a half for any hours worked over the standard 40. Types of Exempt Employees The Fair Labor Standards Act (FLSA) recognizes three main categories of exempt workers:. Executive. Professional. Administrative These categories are purposefully broad to encompass many types of jobs. However, it is the tasks performed on the job, not the job title alone, which determine exempt vs.

Non-exempt employment status. The FLSA guarantees non-exempt employees one and one-half times their normal pay rate for overtime worked during a given work period. Guidelines for Exemption from Overtime Pay Requirements Administrative, executive and professional employees, salespeople, and STEM (Science, Technology, Engineering, and Math) employees can be classified as exempt and, therefore, ineligible for overtime pay if they meet the following criteria. Employees are paid a salary as opposed to being paid on an hourly basis. Employees earn at least $455 per week. Employees are paid a salary for any week they work. In addition, to qualify, employees generally must also meet certain employment tests regarding their salary, job duties and responsibilities.

Exceptions to Overtime Requirements In general, non-exempt employees earning less than $455 per week, which is $23,660 per year, are guaranteed. Some exceptions to this include researchers or those working under an educational or governmental grant. Examples:. Susan is an exempt employee, therefore not entitled to. John is a non-exempt employee, so he works as many overtime hours as he can because he earns one and a half times his hourly wage. Bethany earns $400 per week, so she is guaranteed to earn overtime for her extra hours at the office.

After her promotion and salary increase, Reshma was no longer a non-exempt employee eligible for overtime pay. Rob took the first of two job offers despite the lower salary because he would be eligible for overtime pay. Changes to Overtime Pay Since 2016 The following changes were expected to go into effect on December 1, 2016:. The salary for eligibility for overtime pay would be increased from $455 per week to $913 per week or $47,476 per year. The salary threshold for eligibility would be updated every three years, beginning on January 1, 2020, based on wage growth. Update: A federal judge in Texas has temporarily blocked the overtime rules scheduled to go into effect on December 1, 2016.

The current overtime pay rules will remain in effect while the ruling is in place. The Department of Labor has since filed a notice to appeal the injunction, as well as moved to expedite the appeal, an action approved by the Court. The Department of Labor released a statement that it vehemently disagrees with the decision by the Court, and maintains the legality of their recent Overtime Final Rule. Since the block, an amicus brief was filed by dozens of Congress Members, urging the Court to reconsider the injunction.

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Garnishment What is garnishment? Garnishment is a legal process by which a person to whom you owe money and who has started a lawsuit against you seeks to obtain money from your bank account or paycheck. When is garnishment possible? Before a creditor can start to garnish your wages or bank account, it must first have started a lawsuit to collect money that it claims you owe. If the creditor obtains a judgment against you—regardless of whether it’s a judgment after a hearing or trial or a default judgment—Minnesota law allows the creditor to begin the garnishment process. (For more information on how to respond to any lawsuit that is started against you, please refer to the Attorney General publication, ) Minnesota law also allows a creditor to start the garnishment process without obtaining a judgment if you are served with a lawsuit that you don’t answer in a certain amount of time, or if the creditor demonstrates to the court that you intend to try to put your money out of reach of your creditors.

How is garnishment started? As noted above, creditors can garnish both wages and bank accounts. To begin the garnishment process, a creditor sends a “Garnishment Summons” to your bank or employer (known as the “Garnishee”). The process for garnishing wages differs from the process for garnishing bank accounts. Both processes are described in more detail below.

Garnishing your Wages A creditor that seeks to garnish your wages must first send you a Notice of Intent to Garnish Earnings before your wages are garnished. If you do not object within 10 days, your wages can be garnished.

If you are eligible for and wish to claim an “exemption” from garnishment, it is important that you complete and return the necessary paperwork, which can be submitted anytime during the garnishment. How much of your wages can be garnished? Creditors generally cannot garnish more than 25 percent of your “disposable wages.' “Disposable” wages are the earnings that remain after deducting all withholdings required by law, or any of your disposable wages if you make less than $290 per week. These limits do not apply to judgments for child support. When are your wages exempt from garnishment?

The wages of people who receive certain types of government assistance are exempt from garnishment if the person fills out an exemption form. The Notice of Intent to Garnish Earnings should contain a list of categories that make your wages exempt from garnishment. In general, if you have received government assistance based on need within the past six months, then creditors cannot garnish your wages for two months after the date you last received the assistance.

“Government assistance based on need” includes assistance from government programs such as:. Minnesota Family Investment Program. Diversionary Work Program. Medical Assistance. General Assistance. General Assistance Medical Care.

Emergency General Assistance. Minnesota Supplemental Assistance. MSA Emergency Assistance. Supplemental Security Income. Energy Assistance and.

Following The Money

Emergency Assistance. An exemption does not apply automatically; rather, to qualify for an exemption, you must complete the appropriate paperwork. What paperwork must I complete to show that my wages are exempt from garnishment? To claim that your wages are exempt from garnishment, you must promptly return to the creditor’s attorney the “Debtor’s Exemption Claim Notice” that came with the Notice of Intent to Garnish Earnings.

You must include a copy of your last 60 days of bank statements with this paperwork. Calling the creditor is not sufficient to qualify you for an exemption; rather, you must complete the necessary paperwork. If you do not return the exemption notice and bank statements to the creditor’s attorney within 10 days of receiving notice of the intent to garnish your wages, the creditor can begin to garnish money from your wages, and can continue to do so for up to 70 days. If your earnings are garnished after you claim an exemption, you may petition the court for a determination of your right to claim an exemption. If a court finds that the creditor disregarded your claim of exemption in bad faith, you will be entitled to costs, reasonable attorneys’ fees, damages, and an amount not to exceed $100.

If a creditor disagrees with your claim of exemption, however, the creditor can also petition the court for a determination of your exemption, and, if the court finds that you claimed an exemption in bad faith, you will be assessed costs and reasonable attorneys’ fees, plus an amount not to exceed $100. Garnishing your Bank Account A creditor starts the garnishment of your bank account by serving the bank with a “Garnishment Summons.” The bank will then freeze a sufficient amount of money in your account to pay the debt to the creditor. If you are eligible for and wish to claim an exemption, it is important that you complete and return the necessary paperwork on time. What can I expect if my bank account is garnished? Within two days of receiving the Garnishment Summons, the bank will send you a garnishment notice, instructions and two copies of an “Exemption Form.” You will not receive notice of the garnishment until after your funds are frozen. You will not have access to your funds while they are frozen.

This may mean that your checks may bounce, and you may incur overdraft charges during this time. When is my bank account exempt from garnishment? Some money in your bank account may be exempt from garnishment. The Exemption Form will list the categories that may make your bank account exempt from garnishment.