[Federal Register Volume 59, Number 60 (Tuesday, March 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7233]


  Federal Register / Vol. 59, No. 60 / Tuesday, March 29, 1994 /
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[[Page Unknown]]

[Federal Register: March 29, 1994]


                                                    VOL. 59, NO. 60

                                            Tuesday, March 29, 1994
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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 582

 RIN 3206-AF83

 

Commercial Garnishment of Federal Employees' Pay

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comments.

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SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to implement the commercial garnishment of Federal 
employees' pay. This part provides procedures and guidance for 
Executive Branch agencies of the Federal Government to process 
commercial garnishment orders, including tax levies from State and 
local governments.

DATES: Effective date: March 29, 1994. Comments should be received by 
April 28, 1994.

ADDRESSES: Send or deliver comments to Lorraine Lewis, General Counsel, 
Office of Personnel Management, room 7355, 1900 E Street, NW., 
Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Murray M. Meeker, Attorney, Office of 
the General Counsel, (202) 606-1920.

SUPPLEMENTARY INFORMATION: On October 6, 1993, Congress enacted section 
9 of Public Law 103-94 which waived the Federal Government's sovereign 
immunity to permit compliance with garnishment orders for commercial 
debts. On February 3, 1994, the President signed Executive Order Number 
12897 which delegated responsibility to OPM to issue implementing 
regulations for most of the Executive Branch. These regulations are in 
accordance with this delegation of authority. OPM anticipates that in 
most instances, agents previously designated to receive garnishment 
orders based on obligations of child support and/or alimony will be 
similarly designated to receive commercial garnishment orders. OPM 
requests that in addition to providing comments concerning these 
proposed regulations, agencies advise OPM if they would prefer to 
designate different agents to receive commercial garnishment orders. 
Because the commercial garnishment provisions in Public Law 103-94, 
section 9, became effective on February 3, 1994, OPM believes that it 
is important to issue these regulations as an interim rule with an 
immediate effective date. OPM believes that the need for immediate 
implementing regulations to facilitate the processing of and compliance 
with commercial garnishment orders both justifies and necessitates 
publication without a Notice of Proposed Rulemaking as would ordinarily 
be provided pursuant to 5 U.S.C. 553(b)(A). For these same reasons, OPM 
believes that a delayed effective date is not required pursuant to 5 
U.S.C. 553(d)(2). OPM will, however, consider any public comments 
before issuing a final rule.

Regulatory Flexibility Act

    I certify that these regulations will not have significant economic 
impact on a substantial number of small entities because their effects 
are limited to Federal employees and their creditors.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

List of Subjects in 5 CFR Part 582

    Claims.

U.S. Office of Personnel Management.
Lorraine A. Green,
Deputy Director.

    Accordingly, OPM is adding part 582 of title 5, Code of Federal 
Regulations as follows:

PART 582--COMMERCIAL GARNISHMENT OF FEDERAL EMPLOYEES' PAY

Subpart A--Purpose, Definitions, and Exclusions

Sec.
582.101  Purpose.
582.102  Definitions.
582.103  Exclusions

Subpart B--Service of Legal Process

582.201  Agent to receive process.
582.202  Service of legal process.
582.203  Information minimally required to accompany legal process.

Subpart C--Compliance with Process

582.301  Suspension of payment.
582.302  Notification of employee-obligor.
582.303  Response to legal process or interrogatories.
582.304  Nonliability for disclosure.
582.305  Honoring legal process.
582.306  Lack of entitlement by the employee-obligor to pay from the 
agency served with legal process.

Subpart D--Consumer Credit Protection Act Restrictions

582.401  Aggregate disposable earnings.
582.402  Maximum garnishment limitations.

Subpart E--Implementation by Agencies

582.501  Rules, regulations, and directives by agencies.

    Authority: 5. U.S.C. 5520a; 15 U.S.C. 1673; E.O. 12897.

Appendix A to Part 582--List of Agents Designated To Accept Legal 
Process

Subpart A--Purpose, Definitions, and Exclusions


Sec. 582.101  Purpose.

    Section 5520a of title 5 of the United States Code provides that 
with certain exceptions set forth in this part, pay from an agency to 
an employee is subject to legal process in the same manner and to the 
same extent as if the agency were a private person. The purpose of this 
part is to implement the objectives of section 5520a as they pertain to 
each executive agency of the United States Government, except with 
regard to employees of the United States Postal Service, the Postal 
Rate Commission, and the General Accounting Office.


Sec. 582.102  Definitions.

    In this part--
    (a) Agency means each agency of the executive branch of the Federal 
Government, excluding the United States Postal Service, the Postal Rate 
Commission, and the General Accounting Office; agency does not include 
the government of the District of Columbia or the territories and 
possessions of the United States.
    (b) Employee or employee-obligor means an individual who is 
employed by an agency as defined in this section; except for reemployed 
annuitants and retired members of the uniformed services who are 
employed by an agency, employee does not include a retired employee, 
member of the uniformed services, or a retired member of the uniformed 
services.
    (c) Legal process means any writ, order, summons, or other similar 
process in the nature of garnishment, which may include an attachment, 
writ of execution, court ordered wage assignment, or tax levy from a 
State or local government, which--
    (1) Is issued by: (i) A court of competent jurisdiction, including 
Indian tribal courts, within any State, territory, or possession of the 
United States, or the District of Columbia. As stated in section 
582.101, pay is subject to legal process in the same manner and to the 
same extent as if the agency were a private person. There is, 
therefore, no requirement in this part that, for example, legal process 
be signed by a judge; or
    (ii) An authorized official pursuant to an order of a court of 
competent jurisdiction or pursuant to State or local law; or
    (iii) A State agency authorized to issue income withholding notices 
pursuant to State or local law; and
    (2) Orders an agency to withhold an amount from the pay of an 
employee-obligor and to make a payment of such withholding to a person 
for a specifically described satisfaction of a legal debt of the 
employee-obligor, or recovery of attorney fees, interest, or court 
costs;
    (d) Person may include an individual, partnership, corporation, 
association, joint venture, or private organization, and includes the 
plural of that term; person may include a State or local Government as 
well as a foreign entity or a foreign governmental unit.
    (e) In conformance with 5 U.S.C. 5520a, pay means basic pay; 
premium pay paid under chapter 55, subchapter V, of title 5 of the 
United States Code; any payment received under chapter 55, subchapters 
VI, VII, or VIII, of title 5 of the United States Code; severance pay 
and back pay under chapter 55, subchapter IX, of title 5 of the United 
States Code; sick pay, and any other paid leave; incentive pay; 
locality pay (including interim geographic adjustments, special pay 
adjustments for law enforcement officers, and locality-based 
comparability payments); and any other compensation paid or payable for 
personal services, whether such compensation is denominated as pay, 
wages, salary, lump-sum leave payments, commission, bonus, award, or 
otherwise; but does not include awards for making suggestions, 
reimbursement for expenses incurred by an individual in connection with 
employment, or allowances in lieu thereof.


Sec. 582.103  Exclusions.

    In determining the amount of pay subject to garnishment under this 
part, there shall be excluded amounts which:
    (a) Are owed by the employee-obligor to the United States;
    (b) Are required by law to be deducted from the employee-obligor's 
pay, including, but not limited to: (1) Amounts withheld from benefits 
payable under title II of the Social Security Act;
    (2) Federal employment taxes; and
    (3) Amounts deducted for Medicare;
    (c) Are properly withheld for Federal, State, or local income tax 
purposes, if the withholding of the amounts is authorized or required 
by law and if amounts withheld are not greater than would be the case 
if the employee-obligor claimed all dependents to which the employee-
obligor were entitled. The withholding of additional amounts pursuant 
to section 3402(i) of title 26 of the United States Code may be 
permitted only when the employee-obligor presents evidence of a tax 
obligation which supports the additional withholding;
    (d) Are deducted as health insurance premiums;
    (e) Are deducted as normal retirement contributions, not including 
amounts deducted for supplementary coverage. For purposes of this 
section, all amounts contributed under sections 8351 and 8432(a) of 
title 5 of the United States Code to the Thrift Savings Fund are deemed 
to be normal retirement contributions. Except as provided in this 
paragraph, amounts voluntarily contributed toward additional retirement 
benefits are considered to be supplementary; or
    (f) Are deducted as normal life insurance premiums from salary or 
other remuneration for employment, not including amounts deducted for 
supplementary coverage. Federal Employees' Group Life Insurance 
premiums for ``Basic Life'' coverage are considered to be normal life 
insurance premiums; all optional Federal Employees' Group Life 
Insurance premiums and any life insurance premiums paid for by 
allotment are considered to be supplementary.

Subpart B--Service of Legal Process


Sec. 582.201  Agent to receive process.

    (a) Except as provided in appendix A to this part, appendix A to 5 
CFR part 581 lists agents designated to accept service of process under 
part 581 and this part.
    (b) United States Attorneys are not considered appropriate agents 
to accept service of process.


Sec. 582.202  Service of legal process.

    (a) A party using this part shall serve legal process on the agent 
to receive process as explained in Sec. 582.201. Where the legal 
process is directed to an agency, and the purpose of the legal process 
is to compel an agency to garnish an employee's pay, the legal process 
need not expressly name the agency as a garnishee.
    (b) Service of legal process may be accomplished by certified or 
registered mail, return receipt requested, or by personal service upon 
the agent to receive process as explained in Sec. 582.201, or if no 
agent has been designated, then upon the head of the employee-obligor's 
employing agency. The designated agent shall note the date and time of 
receipt on the legal process.
    (c) Parties bringing garnishment actions shall comply with the 
service of process provisions in this section. Service will not be 
effective where parties fail to comply with the service of process 
provisions of this section, notwithstanding whether the party bringing 
the garnishment action has complied with the service of process 
requirements of the jurisdiction issuing the legal process.


Sec. 582.203  Information minimally required to accompany legal 
process.

    (a) Sufficient identifying information must accompany the legal 
process in order to enable processing by the agency. Parties seeking 
garnishment actions are, therefore, asked to provide the following 
identifying information concerning the employee-obligor:
    (1) Full name;
    (2) Date of birth;
    (3) Employment number or social security number;
    (4) Component of the agency for which the employee-obligor works;
    (5) the official duty station or worksite; and
    (6) home address.
    (b) If the information submitted is not sufficient to identify the 
employee-obligor, the legal process shall be returned directly to the 
court, or other authority, with an explanation of the deficiency. 
However, prior to returning the legal process, if there is sufficient 
time prior to the time limits imposed in Sec. 582.303, an attempt 
should be made to inform the party who caused the legal process to be 
served, or the party's representative, that it will not be honored 
unless adequate identifying information is supplied.

Subpart C--Compliance With Legal Process


Sec. 582.301  Suspension of payment.

    Upon proper service of legal process as specified in Secs. 582.202 
and 582.203, the agency shall suspend, i.e., withhold, payment of such 
moneys for the amount necessary to permit compliance with the legal 
process in accordance with this part.


Sec. 582.302  Notification of employee-obligor.

    (a) As soon as possible, but not later than 15 calendar days after 
the date of valid service of legal process, the agent designated to 
accept legal process shall send to the employee-obligor, at his or her 
duty station or last known home address, written notice that such 
process has been served, including a copy of the legal process;
    (b) The agency may provide the employee-obligor with the following 
additional information: (1) Copies of any other documents submitted in 
support of or in addition to the legal process;
    (2) Notice: That the United States does not represent the interests 
of the employee-obligor in the pending legal proceedings; and
    (3) Advice: That the obligor may wish to consult legal counsel 
regarding defenses to the legal process that he or she may wish to 
assert.


Sec. 582.303  Response to legal process or interrogatories.

    (a) Whenever the designated agent is effectively served with legal 
process, the agent shall respond within 30 calendar days, or within 
such longer period as may be prescribed by applicable State or local 
law, after the date valid service is made. The agent shall also respond 
within this time period to interrogatories which accompany legal 
process.
    (b) If State or local law authorizes the issuance of 
interrogatories prior to or after the issuance of legal process, the 
agent shall respond to the interrogatories within 30 calendar days, or 
within such longer period as may be prescribed by applicable State or 
local law, after receipt.


Sec. 582.304  Nonliability for disclosure.

    (a) No agency employee whose duties include responding to 
interrogatories pursuant to Sec. 582.303(b), shall be subject to any 
disciplinary action or civil or criminal liability or penalty for any 
disclosure of information made in connection with the carrying out of 
any duties pertaining directly or indirectly to answering such 
interrogatories.
    (b) However, an agency would not be precluded from taking 
disciplinary action against an employee who consistently or purposely 
failed to provide correct information requested by interrogatories.


Sec. 582.305  Honoring legal process.

    (a) The agency shall comply with legal process, except where the 
process cannot be complied with because: (1) It is not regular on its 
face;
    (2) The legal process would require the withholding of funds not 
deemed pay as described in Sec. 582.102(a)(5);
    (3) It does not comply with section 5520a of title 5 of the United 
States Code or with the mandatory provisions of this part; or
    (4) An order of a court of competent jurisdiction enjoining or 
suspending the operation of the legal process has been served on the 
agency.
    (b) While an agency will not comply with legal process which, on 
its face, indicates that it has expired or is otherwise no longer 
valid, legal process will be deemed valid notwithstanding the fact that 
the underlying debt and/or the underlying judgment arose prior to the 
effective date of section 5520a of title 5 of the United States Code.
    (c) While the filing of an appeal by an employee-obligor will not 
generally delay the processing of a garnishment action, if the 
employee-obligor establishes that the law of the jurisdiction which 
issued the legal process provides that the processing of the 
garnishment action will be suspended during an appeal, and if the 
employee-obligor establishes that he or she has filed an appeal, the 
employing agency shall comply with the applicable law of the 
jurisdiction and delay or suspend the processing of the garnishment 
action.
    (d) Under the circumstances set forth in Sec. 582.305 (a) or (b), 
or where the agency is directed by the Justice Department not to comply 
with the legal process, the agency shall respond directly to the court, 
or other authority, setting forth its reasons for non-compliance with 
the legal process. In addition, the agency shall inform the party who 
caused the legal process to be served, or the party's representative, 
that the legal process will not be honored. Thereafter, if litigation 
is initiated or appears imminent, the agency shall immediately refer 
the matter to the United States Attorney for the district from which 
the legal process issued. To ensure uniformity in the executive branch, 
agencies which have statutory authority to represent themselves in 
court shall coordinate their representation with the United States 
Attorney.
    (e) In the event that an agency is served with more than one legal 
process or garnishment order with respect to the same payments due or 
payable to the same employee, the agency shall satisfy such processes 
in priority based on the time of service: Provided, That in no event 
will the total amount garnished for any pay or disbursement cycle 
exceed the applicable limitation set forth in Sec. 582.402. Provided 
further, That processes which are not limited in time shall preserve 
their priority based on time of service until fully discharged.
    (f) Legal process to which an agency is subject under sections 459, 
461, and 462 of the Social Security Act (42 U.S.C. 659, 661, and 662) 
for the enforcement of the employee's legal obligation to provide child 
support or make alimony payments, shall have priority over any legal 
process to which an agency is subject under this section.
    (g) Neither the United States, any disbursing officer, nor any 
executive agency shall be liable for any payment made from moneys due 
from, or payable by, the United States to any individual pursuant to 
legal process regular on its face, if such payment is made in 
accordance with this part. Where an agency initially determines that 
legal process should not be honored, if it subsequently determines that 
its initial determination was erroneous, it may correct its initial 
determination and honor the legal process. If an agency corrects an 
error or is required to do so by a court or other authority, under no 
circumstances will the agency be required to pay more than it if had 
originally honored the legal process.
    (h) Agencies affected by legal process served under this part shall 
not be required to vary their normal pay or disbursement cycles to 
comply with the legal process. However, legal process, valid at the 
time of service, which is received too late to be honored during the 
disbursement cycle in which it is received, shall be honored, to the 
extent that the legal process may be satisfied, during the next 
disbursement cycle within the limits set forth in Sec. 582.402. The 
fact that the legal process may have expired during this period would 
not relieve the agency of its obligation to honor legal process which 
was valid at the time of service. If, in the next disbursement cycle, 
no further payment will be due from the agency to the employee-obligor, 
the agency shall follow the procedures set forth in Sec. 582.306.
    (i) Agencies need not establish escrow accounts in order to comply 
with legal process. Therefore, even if the amount garnished by an 
agency in one disbursement cycle is not sufficient to satisfy the 
entire indebtedness, the agency need not retain those funds until the 
amount retained would satisfy the entire indebtedness. On the contrary, 
agencies will, in most instances, remit the garnished amount after each 
disbursement cycle. Agencies need not pro-rate payments for less than a 
full disbursement cycle.
    (j) If any agency receives legal process which is regular on its 
face, the agency shall not be required to ascertain whether the 
authority which issued the legal process had obtained personal 
jurisdiction over the employee-obligor.
    (k) At the discretion of the executive agency, the agency's 
administrative costs in executing a garnishment may be added to the 
garnishment amount and the agency may retain costs recovered as 
offsetting collections. An administrative fee may be assessed for each 
legal process that is received and processed by an agency.
    (l) Where an employee-obligor establishes that he or she has filed 
a bankruptcy petition under section 301, 302, or 303 of title 11 of the 
United States Code, the agency would be required to comply with the 
automatic stay provision of the Revised Bankruptcy Act, section 362(a) 
of title 11 of the United States Code, and cease any garnishment action 
affecting the employee-obligor petitioner.


Sec. 582.306  Lack of entitlement by the employee-obligor to pay from 
the agency served with legal process.

    (a) When legal process is served on an agency and the individual 
identified in the legal process as the employee-obligor is found not to 
be entitled to pay from the agency, the agency shall follow the 
procedures set forth in the legal process for that contingency or, if 
no procedures are set forth therein, the agency shall return the legal 
process to the court, or other authority from which it was issued, and 
advise the court, or other authority, that the identified employee-
obligor is not entitled to any pay from the agency.
    (b) Where it appears that the employee-obligor is only temporarily 
not entitled to pay from the agency, the court, or other authority, 
shall be fully advised as to why, and for how long, the employee-
obligor's pay will not be garnished, if that information is known by 
the agency and if disclosure of that information would not be 
prohibited.
    (c) In instances where an employee-obligor separates from 
employment with an agency that had been honoring a continuing legal 
process, the agency shall inform the party who caused the legal process 
to be served, or the party's representative, and the issuing court, or 
other authority, that the garnishment action is being discontinued. In 
cases where the employee-obligor has been employed by either another 
agency or by a private employer, and where this information is known by 
the agency, the agency shall provide the party with the designated 
agent for the new employing agency or with the name and address of the 
private employer.

Subpart D--Consumer Credit Protection Act Restrictions


Sec. 582.401  Aggregate disposable earnings.

    In accordance with the Consumer Credit Protection Act, the 
aggregate disposable earnings under this part are the employee-
obligor's pay less those amounts excluded in accordance with 
Sec. 582.103.


Sec. 582.402  Maximum garnishment limitations.

    Pursuant to section 1673(a)(1) of title 15 of the United States 
Code (the Consumer Credit Protection Act, as amended) and the 
Department of Labor regulations at title 29, Code of Federal 
Regulations, part 870, the following limitations are applicable: (a) 
Unless a lower maximum limitation is provided by applicable State or 
local law, the maximum part of an employee-obligor's aggregate 
disposable earnings subject to garnishment to enforce any legal debt 
other than an order for child support or alimony, shall not exceed 25 
percent of the employee-obligor's aggregate disposable earnings for any 
workweek. Furthermore, the following dollar limitations, which are 
contained in title 29 of the Code of Federal Regulations, part 870, 
must be applied in determining the garnishable amount of the employee's 
aggregate disposable earnings: (1) If the employee-obligor's aggregate 
disposable earnings for the workweek are in excess of 40 times the Fair 
Labor Standards Act (FLSA) minimum hourly wage, 25% of the employee-
obligor's aggregate disposable earnings may be garnished. For example, 
when the FLSA minimum wage rate is $4.25 per hour, this rate multiplied 
by 40 equals $170.00 and thus, if an employee-obligor's disposable 
earnings are in excess of $170.00 for a workweek, 25% of the employee-
obligor's disposable earnings are subject to garnishment.
    (2) If the employee-obligor's aggregate disposable earnings for a 
workweek are less than 40 times the FLSA minimum hourly wage, 
garnishment may not exceed the amount by which the employee-obligor's 
aggregate disposable earnings exceed 30 times the current minimum wage 
rate. For example, at an FLSA minimum wage rate of $4.25 per hour, the 
amount of aggregate disposable earnings which may not be garnished is 
$127.50 [$4.25 x 30]. Only the amount above $127.50 is garnishable.
    (3) If the employee-obligor's aggregate disposable earnings in a 
workweek are equal to or less than 30 times the FLSA minimum hourly 
wage, the employee-obligor's earnings may not be garnished in any 
amount.
    (b) There is no limit on the percentage of an employee-obligor's 
aggregate disposable earnings that may be garnished for a State or 
local tax obligation or for bankruptcy purposes.

Subpart E--Implementation by Agencies


Sec. 582.501  Rules, regulations, and directives by agencies.

    Appropriate officials of all agencies shall, to the extent 
necessary, issue implementing rules, regulations, and/or directives 
that are consistent with this part.

Appendix A to Part 582--List of Agents Designated To Accept Legal 
Process

    (The agents designated to accept legal process are listed in 
appendix A to part 581. Appendix A to part 582 provides listings 
only for those executive agencies where the designations differ from 
those found in appendix A to part 581.)

I. Departments

Department of Defense, Defense Finance and Accounting Service, 
Cleveland Center, Office of General Counsel, Attention: Code L, P.O. 
Box 998002, Cleveland, OH 44199-8002, (216) 522-5301.

    Agents for receipt of all legal process for all Department of 
Defense civilian employees except where another agent has been 
designated as set forth below.
    For requests that apply to employees of the Army and Air Force 
Exchange Service or to civilian employees of the Defense Contract Audit 
Agency (DCAA) and the Defense Logistics Agency (DLA) who are employed 
outside the United States: See appendix A to part 581.
    For requests that apply to civilian employees of the Army Corps of 
Engineers, the National Security Agency, the Defense Intelligence 
Agency, and non-appropriated fund civilian employees of the Air Force, 
serve the following offices:

Army Corps of Engineers, U.S. Army Corps of Engineers, Omaha District, 
Central Payroll Office, Attn: Garnishments, P.O. Box 1439 DTS, Omaha, 
NE 68101-1439.
National Security Agency, General Counsel, National Security Agency/
Central Security Service, 9800 Savage Rd., Ft. G. Mead, MD 20755-6000.
Defense Intelligence Agency, Office of General Counsel, Defense 
Intelligence Agency, Pentagon, 2E238, Washington, DC 20340-1029.
Air Force non-appropriated fund employees, Office of General Counsel, 
Air Force Services Agency, 10100 Reunion Place, suite 503, San Antonio, 
TX 78216-4138

    For civilian employees of the Army, Navy and Marine Corps who are 
employed outside the United States, serve the following offices:

Army Civilian Employees Europe, 266th Theater Finance Command, ATTN: 
AEUCF-CPF, APO New York 09007-1037.
Army Civilian Employees in Japan, US Army F&AO Japan, Unit 45005, Camp 
Zama, APO AP 96343-0087.
Army Civilian Employees in Korea, Commander, 175th TFC (Korea), APO AP 
96301-007361.
Army Civilian Employees in Panama, DCSRM Finance & Accounting Office, 
Unit 7153, ATTN: SORM-FAP-C, APO AA 34004-5000.
Navy and Marine Corps Civilian Employees Overseas, Director of the 
Office of Civilian Personnel Management, Office of the General Counsel, 
Navy Department, 800 N. Quincy St., Arlington, VA 22203-1998.
[FR Doc. 94-7233 Filed 3-28-94; 8:45 am]
BILLING CODE 6325-01-M