APA Comments on
Nebraska Garnishment Bills
By Alice P. Jacobsohn, Esq.
APA's Government Relations Task Force (GRTF) Subcommittee on Child Support and Other Garnishments is submitting comments to the Nebraska Judiciary Committee on four pieces of legislation regarding garnishment processes and withholding limits. By way of introduction, APA wrote, "The GRTF Subcommittee on Child Support and Other Garnishments seeks legislative and regulatory solutions to improve garnishment processes and procedures and create uniformity among states. In turn, these improvements increase compliance levels for the benefit of all stakeholders." The proposed bills include the following:
Conditional Support for L.B. 37
- L.B. 37 to adopt the Uniform Wage Garnishment Act,
- L.B. 136 to change provisions relating to garnishment proceedings,
- L.B. 229 to change provisions relating to garnishments, and
- L.B. 526 to change provisions relating to debtor's rights, garnishment, attachment, and other debt collection procedures.
L.B. 37 is Nebraska's version of the Uniform Wage Garnishment Act (UWGA). "APA supports the [UWGA] as approved by the National Conference of Commissioners on Uniform State Laws," the subcommittee wrote. "Therefore, we are pleased to support L.B. 37 with some changes." The UWGA streamlines the wage-garnishment process, resolves priority issues when multiple garnishment orders are received, and allows creditors and employers to agree on the method by which payments will be transmitted to the creditor (e.g., electronically). In addition, the UWGA creates standard definitions and procedures for increased understanding by creditors, employers, and employees.
L.B. 37 fails to include reasonable employer administrative fees and cuts employers' response time in half. "APA recommends that Nebraska implement an up-front employer administrative fee of $20 and a per-payment fee of $3.50 in order to adequately and fairly cover an employer's costs," the subcommittee stated. These fees are based on information collected from APA members about their costs for receiving, processing, and implementing creditor wage garnishments.
APA wrote, "The UWGA allows a garnishee (employer) 21 days to respond to an affidavit in a garnishment action, whereas L.B. 37 allows only 10 days. Further, the UWGA would hold a garnishee liable for failure to act after 22 days, whereas L.B. 37 allows only 11 days." APA pointed out, "In the process of developing the UWGA, stakeholders discussed the time frames for processing creditor garnishment orders extensively to reach a reasonable conclusion. With the exception of the affidavit to employers, L.B. 37 maintains all other timeframes recommended by the UWGA."Other Proposed Bills
L.B. 136 changes some of the provisions in the state's garnishment proceedings, but these changes are inconsistent with the UWGA. For example, L.B. 37 removes current law provisions on wage garnishment procedures and replaces them with the processes described in the UWGA. L.B. 136 revises the existing wage garnishment law regarding the release of funds, credits, or indebtedness. Creditors and employers could not comply with both bills if passed.
L.B. 229 is about financial institutions and account garnishments on which APA would not normally comment. However, the bill discusses administrative fees for garnishments that banks already receive and makes some adjustments to those fees. APA raised a fairness issue for employers placed in a similar position as banks for the cost of processing wage garnishments. If the state recognizes these costs for banks, the state also should recognize the costs for employers.
L.B. 526 would change provisions relating to debtors' rights, garnishment, attachment, and other debt collection procedures. Like L.B. 136, L.B. 526 includes language that conflicts with L.B. 37. For example, under L.B. 37 withholding under a garnishment is limited to the lesser of 20% of disposable earnings or the amount by which disposable earnings exceed 40 times the federal minimum wage. Under L.B. 526 withholding is limited to the lesser of 15%, the amount by which disposable earnings exceed 30 times the state minimum wage, or 25% if the individual is not a head of a family.
In addition, L.B. 526 proposes to use the state minimum wage instead of the federal minimum wage for garnishments of individuals earning wages in pay periods other than weekly. This is inconsistent with L.B. 37 and could cause undue difficulty for employers.
The Nebraska legislature is the only state with a single-house system, referred to as a unicameral legislature. A session generally runs from January to June, but bills often are carried over to the next year and studied in the summer and fall between sessions. L.B. 526 was postponed indefinitely in 2017, but could still be considered in 2018. The other bills are still pending in the Judiciary Committee. APA is advocating for passage of L.B. 37 in the 2018 session. Alice P. Jacobsohn, Esq., is Senior Manager of Government Relations for the APA.