An administrative wage garnishment (AWG) order looks like any other garnishment when it lands in the mailroom, but it is a different animal. No judge signed it. A federal agency issued it on its own authority after giving the employee notice and a chance at a hearing, and federal law makes it binding on you the moment you receive it. If you treat it like a creditor writ and wait for a court document, or send it back with a note that you only honor court orders, the employer, not the employee, can end up owing the debt.
This guide walks through what AWG is, who uses it, and exactly what HR and payroll have to do with the order. If your team handles orders only occasionally, our overview of garnishment basics is a useful starting point, and our garnishment training for HR and payroll goes deeper.
Administrative wage garnishment is a collection tool that lets a federal agency order an employer to withhold part of an employee's pay to repay a delinquent non-tax debt owed to the United States, without first getting a court judgment. Two statutes supply most of the authority:
In practice, most AWG orders an employer sees come from one of two places: the Department of Education or a student-loan guaranty agency, or the Bureau of the Fiscal Service (part of Treasury), which runs a Cross-Servicing program that collects delinquent debts referred by other federal agencies and uses AWG as one of its tools. Debts behind these orders include defaulted federal loans, benefit overpayments and other amounts owed to an agency.
Two things AWG is not: it is not an IRS levy (federal tax debts are collected under the Internal Revenue Code levy process, with a different notice and different exempt-amount tables), and it is not a child support income withholding order, which comes from a state child support agency or court.
Student-loan garnishment has been the most volatile piece of this area. The Department of Education announced in December 2025 that it would begin sending AWG notices to defaulted borrowers in January 2026, then on January 16, 2026 announced a delay of involuntary collections, including AWG and Treasury offset, while it implemented repayment changes. At the time of writing, we have not found a Department announcement setting a restart date. Separately, guaranty agencies that hold older FFEL program loans have their own AWG authority under the same statute.
For an employer, the practical rule does not change with the headlines: if you receive a properly issued AWG order, honor it until the issuing agency tells you in writing to suspend or stop. Do not decide on your own that an order is invalid because of something you read about a pause. If an employee says their order should be on hold, the employee raises that with the agency; you continue withholding until the agency notifies you. For the employee-facing side, see our payroll colleagues' guide to student loan garnishments.
The differences matter because they change how you validate the order and what you can push back on.
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Administrative wage garnishment |
Court-ordered creditor garnishment |
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Who issues it |
A federal agency or student-loan guaranty agency |
A state or federal court, at a creditor's request |
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Judgment needed |
No |
Yes, in almost all cases |
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Employee's due process |
Agency notice at least 30 days before; hearing before the agency |
Court proceeding |
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Withholding cap |
15% of disposable pay (or less, see below) |
Generally 25% under federal law, lower in many states |
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State exemptions |
Federal law governs |
State law often adds protection |
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Employer answer |
Return the agency's employer certification |
File an answer with the court |
The due process already happened before the order reached you. Under 31 U.S.C. 3720D(b) and 20 U.S.C. 1095a(a), the agency must mail the debtor written notice at least 30 days before starting proceedings, offer the chance to inspect records and enter a repayment agreement, and provide a hearing. If the employee asks for a hearing in time (by the 15th day after the notice under the statute; the Treasury rule uses 15 business days), the order cannot issue until the hearing official decides, and the decision is due within 60 days of the request. By the time you receive the order, those steps are the agency's responsibility, not yours.
AWG orders typically arrive as a Treasury Standard Form 329 package: SF-329A (letter and important notice to the employer), SF-329B (the wage garnishment order), SF-329C (a wage garnishment worksheet) and SF-329D (employer certification). The order identifies the employee and states either a fixed dollar amount (section 2(a)) or a percentage of disposable pay (section 2(b)), which is 15% unless the agency agreed to, or a hearing official ordered, a lower rate.
Date-stamp the package on receipt. Every deadline runs from receipt, and a mailroom that sits on it for two weeks eats most of your response window.
The SF-329 instructions require the employer to complete the SF-329D certification and return it to the creditor agency within 20 days of receipt. The certification confirms whether the person is your employee, their pay frequency and disposable pay, and whether other withholding orders are already in place. If the person does not work for you, or no longer does, say so on the certification; that is what it is for. Always follow the deadline printed on the form you actually received.
Treasury's employer guidance for Cross-Servicing orders says to start the garnishment immediately. If the next payday falls within 10 days of receiving the order and there is not enough time to set it up, you may start on the second payday after receipt. Under the regulation, you are not required to change your normal pay or disbursement cycles to comply. Withholding then continues every pay period until the agency notifies you to suspend or stop.
Disposable pay for AWG means compensation (salary, wages, bonuses, commissions and vacation pay) remaining after amounts required by law to be withheld, such as federal, state and local income tax and Social Security and Medicare taxes. The Treasury rule also subtracts health insurance premiums. It does not subtract amounts withheld under court orders, voluntary retirement deferrals or other voluntary deductions. This definition is slightly different from the one many payroll teams use for creditor garnishments, which is one reason the SF-329C worksheet exists. Use it. Our post on how to calculate garnishments covers the general mechanics.
Treasury's employer FAQ for Cross-Servicing orders says to send garnished amounts within three business days of withholding them, strongly encourages electronic payment through Pay.gov (one form per employee, using the AWG account number on the order), and otherwise directs checks to the address on the order. Orders from the Department of Education or a guaranty agency carry their own payment instructions; follow the order in front of you.
When the employee leaves, goes on unpaid leave or has a significant pay change, tell the issuing agency promptly in the way the order directs. Keep a copy of every certification, payment record and piece of correspondence with the employee's garnishment file.
Under 31 CFR 285.11(i)(2), the AWG amount for a pay period is the lesser of:
Example, weekly pay: disposable pay of $600. Fifteen percent is $90.00; the amount above $217.50 is $382.50. Withhold $90.00.
Example, low earner: disposable pay of $250. Fifteen percent is $37.50; the amount above $217.50 is $32.50. Withhold $32.50. If disposable pay is $217.50 or less, nothing is withheld that week.
The employee may agree in writing to a higher amount; otherwise the 15% ceiling holds.
The Treasury rule sets the order of operations:
Example: disposable pay of $800 per week and an earlier creditor garnishment taking $150. Twenty-five percent of $800 is $200; minus $150 leaves $50. The normal AWG amount would be $120 (15%). Withhold $50 for AWG. If a support order alone already takes more than 25%, the AWG amount is zero until that changes. Tell the agency on the certification exactly what is ahead of it, so it understands why it is receiving less.
When an employee has several orders at once, priority and caps are where most errors happen; payroll should own that math, and HR should make sure every order reaches payroll the same day it arrives.
Both AWG statutes contain their own anti-retaliation rule, separate from the Consumer Credit Protection Act. Under 31 U.S.C. 3720D(e) and 20 U.S.C. 1095a(a)(8), an employer may not discharge, refuse to employ or take disciplinary action against an individual because of an AWG order. The employee can sue in state or federal court; the court must award attorney's fees to a prevailing employee and may order reinstatement, back pay, punitive damages and other relief. Unlike the CCPA's protection, which covers garnishment for one debt, these provisions are not limited to a single order.
Other protections that sometimes reach HR:
Treat the order as confidential payroll information. Limit access to the people who process it, and keep it out of the personnel file that managers see.
The consequences fall on the employer's balance sheet, not just the employee's. Under 31 U.S.C. 3720D(f) and 20 U.S.C. 1095a(a)(6), an employer that fails to withhold as ordered after receiving the order is liable for the amount it failed to withhold, plus attorney's fees and costs and, at the court's discretion, punitive damages. The agency can sue to collect. The Treasury rule generally has the agency wait until collection against the debtor has stopped, which it treats as having happened if no payment has come in for a year, so a missed order can surface long after the fact.
Common ways employers get there:
Each one is a process failure, which is why a written intake procedure and a trained backup person matter more than any single calculation.
AWG orders are infrequent enough that the person who handled the last one may have left by the time the next one arrives. A one-page procedure, covering who logs the order, who returns the certification within the deadline, who sets up the deduction, who remits and who tracks the stop notice, prevents most of the problems above.
Our Garnishments & Levies Training & Certification program covers this from receipt to remittance: types of wage garnishment orders, employer duties on receipt, issuing authority and instructions, deadlines, child support withholding, multiple orders, employment-status changes and recordkeeping. It is online and self-paced with a bookmark feature, includes a year of access and free updates when the law changes, and offers an optional exam for the Certified Garnishments & Levies Administrator credential. Teams of three or more can enroll together with a manager progress view.
Yes. Federal agencies garnish under 31 U.S.C. 3720D, and the Department of Education and guaranty agencies under 20 U.S.C. 1095a, without a court judgment. The employee received notice and a chance at a hearing before the order was issued. An employer that ignores a valid order can be held liable for the amounts it should have withheld, plus attorney's fees, costs and possibly punitive damages. If you doubt the order is genuine, verify it by contacting the issuing agency at a number you look up independently, but do not wait for a court document.
Up to 15% of disposable pay, but never more than the amount by which weekly disposable pay exceeds 30 times the federal minimum wage ($217.50 at $7.25 an hour). The lower of the two figures applies. If a child support order or an earlier garnishment is already in place, the AWG amount is limited further so that total withholding does not exceed 25% of disposable pay. The employee can consent in writing to a larger amount.
The SF-329 instructions require the employer to return the SF-329D certification to the agency within 20 days of receipt. Treasury's employer guidance says withholding should begin immediately, or on the second payday after receipt if the next payday is within 10 days and there is no time to set it up, and that withheld amounts be sent within three business days. Always check the deadlines printed on the order you received.
The Department of Education announced on January 16, 2026 that it was delaying involuntary collections, including administrative wage garnishment, for loans it holds. At the time of writing we have not found an announced restart date. Guaranty agencies holding older FFEL loans have separate authority. For employers, the rule is simple: if you receive a valid order from the Department or a guaranty agency, withhold as directed until the agency tells you in writing to stop.
No. Both 31 U.S.C. 3720D and 20 U.S.C. 1095a prohibit discharging, refusing to employ or disciplining someone because of an AWG order. A prevailing employee is entitled to attorney's fees, and the court may order reinstatement, back pay and punitive damages. Discipline for unrelated performance or conduct issues is still possible, but document it carefully so the timing does not suggest the garnishment was the reason.
Stop withholding with the final paycheck, remit what was withheld, and notify the issuing agency as the order directs so it can redirect collection. Do not destroy the file. Keep the order, certification, payment confirmations and correspondence with your payroll records in case the agency later asks you to account for what was withheld and sent.
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