[Federal Register Volume 68, Number 237 (Wednesday, December 10, 2003)]
[Rules and Regulations]
[Pages 68760-68765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30407]


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GENERAL SERVICES ADMINISTRATION

41 CFR Part 105-57

[GSPMR Amendment 2003-03; GSPMR Case 2003-105-2]
RIN 3090-AH85


Administrative Wage Garnishment

AGENCY: Office of Finance, General Services Administration (GSA).

ACTION: Final rule.

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SUMMARY: The General Services Administration (GSA) is amending its 
regulations to implement the administrative wage garnishment provisions 
contained in the Debt Collection Improvement Act of 1996 (DCIA). Wage 
garnishment is a process whereby an employer withholds amounts from an 
employee's wages and pays those amounts to the employee's creditor in 
satisfaction of a withholding order. The DCIA authorizes Federal 
agencies to administratively garnish the disposable pay of an 
individual to collect delinquent non-tax debts owed to the United 
States in accordance with regulations issued by the Secretary of the 
Treasury.
    This part was previously titled Collection of Debts by Tax Refund 
Offset. Effective January 1, 1999, the Department of the Treasury 
started to conduct the tax refund offset program as part of the 
centralized offset program, known as the Treasury Offset Program (TOP), 
operated by the Financial Management Service (FMS), a bureau of the 
Department of the Treasury. Since GSA has a cross-servicing agreement 
with FMS, which includes the TOP, the Collection of Debts by Tax Refund 
Offset is no longer valid and is rescinded and replaced with the new 
part, Administrative Wage Garnishment.

DATES: Effective date: December 10, 2003.

FOR FURTHER INFORMATION CONTACT: The Regulatory Secretariat, Room 4035, 
GS Building, Washington, DC 20405, at (202) 208-7312 for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Michael J. Kosar, General Services Administration, 
Office of Finance (BCD), Office of the Chief Financial Officer, Room 
3121, 1800 F Street, NW., Washington, DC 20405, telephone (202) 501-
2029; electronic mail at [email protected]. Please cite GSPMR 
Amendment 2003-03, GSPMR case 2003-105-2.

SUPPLEMENTARY INFORMATION: 

A. Background

    This rule implements the wage garnishment provision in section 
31001(o) of the Debt Collection Improvement Act of 1996 (DCIA), Public 
Law 104-134, 110 Stat. 1321-358 (Apr. 26, 1996), codified at 31 U.S.C. 
3720D. Wage garnishment is a process whereby an employer withholds 
amounts from an employee's wages and pays those amounts to the 
employee's creditor in satisfaction of a withholding order. The DCIA 
authorizes Federal agencies to administratively garnish up to 15 
percent of the disposable pay of a debtor to satisfy delinquent non-tax 
debt owed to the United States. Prior to the enactment of the DCIA, 
agencies were required to obtain a court judgment before garnishing the 
wages of non-Federal employees. Section 31001(o) of the DCIA preempts 
State laws that prohibit wage garnishment or otherwise govern wage 
garnishment procedures.
    As authorized by the DCIA, a Federal agency collecting delinquent 
non-tax debt may administratively garnish a delinquent debtor's wages 
in accordance with regulations promulgated by the Secretary of the 
Treasury. The Financial Management Service (FMS), a bureau of the 
Department of the Treasury, is responsible for promulgating the 
regulations implementing this and other debt collection tools 
established by the DCIA.
    In accordance with the requirements of the DCIA, this rule 
establishes the following rules and procedures:
    1. Notice. At least 30 days before GSA initiates garnishment 
proceedings, the Agency will give the debtor written notice informing 
him or her of the nature and amount of the debt, the intention of GSA 
to collect the debt through deductions from pay, and an explanation of 
the debtor's rights regarding the proposed action.
    2. Rights of the Debtor. GSA will provide the debtor with an 
opportunity to inspect and copy records related to the debt, to 
establish a repayment agreement, and to receive a hearing concerning 
the existence and/or amount of the debt and/or the terms of a repayment 
schedule. A hearing will be held prior to the issuance of a withholding 
order if the debtor's request is received timely. For hearing requests 
that are not received in the specified time frame, GSA will not delay 
issuance of the withholding order prior to conducting a hearing. GSA 
will not garnish the wages of a debtor who has been involuntarily 
separated from employment until that individual has been reemployed 
continuously for at least 12 months. The debtor bears the burden of 
informing GSA of the circumstances surrounding an involuntary 
separation from employment.
    3. Employer's Responsibilities. GSA will send to the employer of a 
delinquent debtor a wage garnishment order directing that the employer 
pay a portion of the debtor's wages to GSA. This rule requires the 
debtor's employer to certify certain payment information about the 
debtor. Employers will not be required to vary their normal pay cycles

[[Page 68761]]

in order to comply with the garnishment order.
    The DCIA prohibits employers from taking disciplinary actions 
against the debtor based on the fact that the debtor's wages are 
subject to administrative garnishment. In addition, the DCIA authorizes 
GSA to sue an employer for amounts not properly withheld from the wages 
payable to the debtor.
    Discussion of Comments. In response to its Notice of Proposed Rule 
(NPR) concerning Administrative Wage Garnishment (68 FR 41290, July 11, 
2003), GSA received one internal comment and one from another agency. A 
review of the comments is provided in the following comment analysis, 
including a discussion of GSA's determination whether to incorporate 
specific suggestions in the final rule. The comment analysis is 
organized by reference to the paragraph in the NPR.
    NPR Sec. 105-57.005, Hearing. One commenter suggested that 
transcripts taken during the course of oral hearing proceedings be 
arranged by the hearing official and all charges associated with the 
taking of the transcript be the responsibility of GSA. The final rule 
incorporates this suggestion.
    NPR Sec. 105-57.008, Amounts withheld. One commenter questioned if 
the NPR has the same net base rule as the current Consumer Credit 
Protection Act (CCPA) limitation of 15 percent of an eligible 
employee's disposable earnings, but not below $154.50 net per week. 
Under the NPR and the final rule, the amount of garnishment is the 
lesser of the amount indicated on the garnishment order up to 15 
percent of the debtor's disposable pay or the amount set forth in 15 
U.S.C. 1673(a)(2), which is the amount by which a debtor's disposable 
pay exceeds an amount equal to thirty times the minimum wage. The 
current minimum wage is $5.15 per hour, times thirty equals $154.50.

B. Executive Order 12866

    This rule is not a significant regulatory action as defined in 
Executive Order 12866. It is hereby certified this regulation, 
including the certification referenced in this final rule (see Sec.  
105-57.007 of this part), will not have a significant economic impact 
on a substantial number of small entities. Although a substantial 
number of small entities will be subject to this regulation and to the 
certification requirement in this rule, the requirements will not have 
a significant economic impact on these entities. Employers of 
delinquent debtors must certify certain information about the debtor 
such as the debtor's employment status and earnings. This information 
is contained in the employer's payroll records. Therefore, it will not 
take a significant amount of time or result in a significant cost for 
an employer to complete the certification form. Even if an employer is 
served withholding orders on several employees over the course of a 
year, the cost imposed on the employer to complete the certifications 
would not have a significant economic impact on that entity. Employers 
are not required to vary their normal pay cycles in order to comply 
with a withholding order issued pursuant to this rule.

C. Regulatory Flexibility Act

    It is hereby certified this regulation will not have a significant 
economic impact on a substantial number of small entities because the 
regulation either (1) results in greater flexibility for GSA to 
streamline debt collection regulations, or (2) reflects the statutory 
language contained in the DCIA. Accordingly, a Regulatory Flexibility 
Analysis is not required.

D. Executive Order 13132

    This regulation will not have a substantial direct effect on the 
states, on the relationship between the national government and the 
states, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined this regulation does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

E. Unfunded Mandates Reform Act of 1995

    This regulation will not result in the expenditure by state, local 
and tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any one (1) year, and it will not significantly 
or uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

F. Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Act, 5 U.S.C. Sec.  804. This 
rule will not result in an annual effect on the economy of $100 million 
or more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign-based companies in domestic or export markets.

G. Paperwork Reduction Act

    This rule does not contain information collection requirements that 
require approval by the Office of Management and Budget under the 
Paperwork Reduction Act, 44 U.S.C. 3507 et seq.

List of Subjects in 41 CFR Part 105-57

    Claims, Government public contracts and property management, Income 
taxes.

    Dated: December 2, 2003.
Stephen A. Perry,
Administrator of General Services.

    For the reasons set out in the preamble, GSA amends 41 CFR chapter 
105 as follows:

CHAPTER 105 [Amended]

    1. Revise Part 105-57 to read as follows:

PART 105-57--ADMINISTRATION WAGE GARNISHMENT

Sec.
105-57.001 Purpose, authority and scope.
105-57.002 Definitions.
105-57.003 General rule.
105-57.004 Notice requirements.
105-57.005 Hearing.
105-57.006 Wage garnishment order.
105-57.007 Certification by employer.
105-57.008 Amounts withheld.
105-57.009 Exclusions from garnishment.
105-57.010 Financial hardship.
105-57.011 Ending garnishment.
105-57.012 Actions prohibited by the employer.
105-57.013 Refunds.
105-57.014 Right of action.

    Authority: 5 U.S.C. Sec. Sec.  552-553, 31 U.S.C. Sec.  3720D, 
31 CFR part 285.11.


Sec.  105-57.001  Purpose, authority and scope.

    (a) This part provides standards and procedures for GSA to collect 
money from a debtor's disposable pay by means of administrative wage 
garnishment to satisfy delinquent non-tax debt owed to the United 
States.
    (b) These standards and procedures are authorized under the wage 
garnishment provisions of the Debt Collection Improvement Act of 1996, 
codified at 31 U.S.C. 3720D, and Department of the Treasury Wage 
Garnishment Regulations at 31 CFR 285.11.
    (c) Scope. (1) This part applies to any GSA program that gives rise 
to a delinquent non-tax debt owed to the United States and that pursues 
recovery of such debt.

[[Page 68762]]

    (2) This part will apply notwithstanding any provision of State 
law.
    (3) Nothing in this part precludes the compromise of a debt or the 
suspension or termination of collection action in accordance with 
applicable law. See, for example, the Federal Claims Collection 
Standards (FCCS), 31 CFR parts 900 through 904.
    (4) The receipt of payments pursuant to this part does not preclude 
GSA from pursuing other debt collection remedies, including the offset 
of Federal payments to satisfy delinquent non-tax debt owed to the 
United States.
    GSA may pursue such debt collection remedies separately or in 
conjunction with administrative wage garnishment.
    (5) This part does not apply to the collection of delinquent non-
tax debt owed to the United States from the wages of Federal employees 
from their Federal employment. Federal pay is subject to the Federal 
salary offset procedures set forth in 5 U.S.C. 5514 and other 
applicable laws. GSA standards and procedures for offsetting Federal 
wage payments are stated in 41 CFR part 105-56.
    (6) Nothing in this part requires GSA to duplicate notices or 
administrative proceedings required by contract or other laws or 
regulations.


Sec.  105-57.002  Definitions.

    (a) Administrative offset, as defined in 31 U.S.C. 3701(a)(1), 
means withholding funds payable by the United States (including funds 
payable by the United States on behalf of a State government) to, or 
held by the United States for, a person to satisfy a claim.
    (b) Business day means Monday through Friday, excluding Federal 
legal holidays. For purposes of computation, the last day of the period 
will be included unless it is a Federal legal holiday.
    (c) Day means calendar day. For purposes of computation, the last 
day of the period will be included unless it is a Saturday, a Sunday, 
or a Federal legal holiday.
    (d) Debtor means an individual who owes a delinquent non-tax debt 
to the United States.
    (e) ``Delinquent'' or ``past-due'' non-tax debt means any non-tax 
debt that has not been paid by the date specified in GSA's initial 
written demand for payment or applicable agreement or instrument 
(including a post-delinquency payment agreement), unless other 
satisfactory payment arrangements have been made.
    (f) Disposable pay means that part of the debtor's compensation 
(including, but not limited to, salary, bonuses, commissions, and 
vacation pay) from an employer remaining after the deduction of health 
insurance premiums and any amounts required by law to be withheld. For 
purposes of this part, ``amounts required by law to be withheld'' 
include amounts for deductions such as social security taxes and 
withholding taxes, but do not include any amount withheld pursuant to a 
court order.
    (g) Employer means a person or entity that employs the services of 
others and that pays their wages or salaries. The term employer 
includes, but is not limited to, State and local Governments, but does 
not include an agency of the Federal Government as defined by 31 CFR 
285.11(c).
    (h) Evidence of service means information retained by GSA 
indicating the nature of the document to which it pertains, the date of 
submission of the document, and to whom the document is being 
submitted. Evidence of service may be retained electronically or 
otherwise, so long as the manner of retention is sufficient for 
evidentiary purposes.
    (i) Financial hardship means an inability to meet basic living 
expenses for goods and services necessary for the survival of the 
debtor and his or her spouse and dependents. See Sec.  105-57.010 of 
this part.
    (j) For the purposes of the standards in this part, unless 
otherwise stated, the term ``Administrator'' refers to the 
Administrator of General Services or the Administrator's delegate.
    (k) For the purposes of the standards in this part, the terms 
``claim'' and ``debt'' are synonymous and interchangeable.
    They refer to an amount of money, funds, or property that has been 
determined by GSA to be due the United States from any person, 
organization, or entity, except another Federal agency, from sources 
which include loans insured or guaranteed by the United States and all 
other amounts due the United States from fees, leases, rents, 
royalties, services, sales of real or personal property, overpayments, 
penalties, damages, interest, fines and forfeitures and all other 
similar sources, including debt administered by a third party as an 
agent for the Federal Government. For the purposes of administrative 
offset under 31 U.S.C. 3716, the terms ``claim'' and ``debt'' include 
an amount of money, funds, or property owed by a person to a State 
(including past-due support being enforced by a State), the District of 
Columbia, American Samoa, Guam, the United States Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, or the Commonwealth of 
Puerto Rico.
    (l) For the purposes of the standards in this part, unless 
otherwise stated, the terms ``GSA'' and ``Agency'' are synonymous and 
interchangeable.
    (m) For the purposes of the standards in this part, unless 
otherwise stated, ``Secretary'' means the Secretary of the Treasury or 
the Secretary's delegate.
    (n) Garnishment means the process of withholding amounts from an 
employee's disposable pay and the paying of those amounts to GSA in 
satisfaction of a withholding order.
    (o) Hearing means a review of the documentary evidence concerning 
the existence and/or amount of a debt, and/or the terms of a repayment 
schedule, provided such repayment schedule is established other than by 
a written agreement entered into pursuant to this part. If the hearing 
official determines that the issues in dispute cannot be resolved 
solely by review of the written record, such as when the validity of 
the debt turns on the issue of credibility or veracity, an oral hearing 
may be provided.
    (p) Hearing official means a Board Judge of the GSA Board of 
Contract Appeals (GSBCA).
    (q) Withholding order means ``Wage Garnishment Order (SF 329B)'', 
issued by GSA. For purposes of this part, the terms ``wage garnishment 
order'' and ``garnishment order'' have the same meaning as 
``withholding order.''
    (r) In this part, words in the plural form shall include the 
singular and vice versa, and words signifying the masculine gender 
shall include the feminine and vice versa. The terms ``includes'' and 
``including'' do not exclude matters not listed but do include matters 
that are in the same general class.


Sec.  105-57.003  General rule.

    Whenever GSA determines a delinquent debt is owed by an individual, 
the Agency may initiate administrative proceedings to garnish the wages 
of the delinquent debtor.


Sec.  105-57.004  Notice requirements.

    (a) At least 30 days before the initiation of garnishment 
proceedings, GSA will send, by first class mail, overnight delivery 
service, or hand delivery to the debtor's last known address a written 
notice informing the debtor of--
    (1) The nature and amount of the debt;
    (2) The intention of GSA to initiate proceedings to collect the 
debt through deductions from pay until the debt and all accumulated 
interest, penalties and administrative costs are paid in full; and

[[Page 68763]]

    (3) The debtor's rights, including those set forth in paragraph (b) 
of this section, and the time frame within which the debtor may 
exercise his or her rights.
    (b) The debtor will be afforded the opportunity--
    (1) To inspect and copy Agency records related to the debt;
    (2) To enter into a written repayment agreement with GSA under 
terms agreeable to the Agency; and
    (3) To request a hearing in accordance with Sec.  105-57.005 of 
this part concerning the existence and/or amount of the debt, and/or 
the terms of the proposed repayment schedule under the garnishment 
order. However, the debtor is not entitled to a hearing concerning the 
terms of the proposed repayment schedule if these terms have been 
established by written agreement under paragraph (b)(2) of this 
section.
    (c) The notice required by this section may be included with GSA's 
demand letter required by 41 CFR 105-55.010.
    (d) GSA will keep a copy of the evidence of service indicating the 
date of submission of the notice. The evidence of service may be 
retained electronically so long as the manner of retention is 
sufficient for evidentiary purposes.


Sec.  105-57.005  Hearing.

    (a) GSA will provide a hearing, which at the hearing official's 
option may be oral or written, if within fifteen (15) business days of 
submission of the notice by GSA, the debtor submits a signed and dated 
written request for a hearing, to the official named in the notice, 
concerning the existence and/or amount of the debt, and/or the terms of 
the repayment schedule (for repayment schedules established other than 
by written agreement under Sec.  105-57.004(b)(2) of this part). A copy 
of the request for a hearing must also be sent to the GSA Board of 
Contract Appeals (GSBCA) at the address indicated in paragraph (b)(2) 
of this section.
    (b) Types of hearing or review. (1) For purposes of this section, 
whenever GSA is required to afford a debtor a hearing, the hearing 
official will provide the debtor with a reasonable opportunity for an 
oral hearing when he/she determines that the issues in dispute cannot 
be resolved by review of the documentary evidence, for example, when 
the validity of the claim turns on the issue of credibility or 
veracity.
    (2) If the hearing official determines that an oral hearing is 
appropriate, he/she will establish the time and location of the 
hearing. An oral hearing may, at the debtor's option, be conducted 
either in-person or by telephone conference. In-person hearings will be 
conducted in the hearing official's office located at GSA Central 
Office, 1800 F St., NW., Washington, DC 20405, or at another location 
designated by the hearing official. All personal and travel expenses 
incurred by the debtor in connection with an in-person hearing will be 
borne by the debtor. All telephonic charges incurred during a hearing 
will be the responsibility of GSA.
    (3) The debtor may represent himself or herself or may be 
represented by another person of his or her choice at the hearing. GSA 
will not compensate the debtor for representation expenses, including 
hourly fees for attorneys, travel expenses, or costs for reproducing 
documents.
    (4) In those cases when an oral hearing is not required by this 
section, the hearing official will nevertheless conduct a ``paper 
hearing'', that is, the hearing official will decide the issues in 
dispute based upon a review of the written record. The hearing official 
will establish a reasonable deadline for the submission of evidence.
    (c) Subject to paragraph (k) of this section, if the debtor's 
written request is received by GSA on or before the 15th business day 
after the submission of the notice described in Sec.  105-57.004(a) of 
this part, the Agency will not issue a withholding order under Sec.  
105-57.006 of this part until the debtor has been provided the 
requested hearing and a decision in accordance with paragraphs (h) and 
(i) of this section has been rendered.
    (d) If the debtor's written request for a hearing is received by 
GSA after the 15th business day following the mailing of the notice 
described in Sec.  105-57.004(a) of this part, GSA may consider the 
request timely filed and provide a hearing if the debtor can show that 
the delay was because of circumstances beyond his or her control. 
However, GSA will not delay issuance of a withholding order unless the 
Agency determines that the delay in filing the request was caused by 
factors over which the debtor had no control, or GSA receives 
information that the Agency believes justifies a delay or cancellation 
of the withholding order.
    (e) After the debtor requests a hearing, the hearing official will 
notify the debtor of--
    (1) The date and time of a telephonic hearing;
    (2) The date, time, and location of an in-person oral hearing; or
    (3) The deadline for the submission of evidence for a written 
hearing.
    (f) Burden of proof. (1) GSA will have the burden of establishing 
the existence and/or amount of the debt.
    (2) Thereafter, if the debtor disputes the existence and/or amount 
of the debt, the debtor must prove by a preponderance of the evidence 
that no debt exists or that the amount of the debt is incorrect. In 
addition, the debtor may present evidence that the terms of the 
repayment schedule are unlawful, would cause a financial hardship to 
the debtor, or that collection of the debt may not be pursued due to 
operation of law.
    (g) The hearing official will arrange and maintain a written 
transcript of any hearing provided under this section. The transcript 
will be made available to either party in the event of an appeal under 
the Administrative Procedure Act, 5 U.S.C. 701 through 706. All charges 
associated with the taking of the transcript will be the responsibility 
of GSA. A hearing is not required to be a formal evidentiary-type 
hearing; however, witnesses who testify in oral hearings will do so 
under oath or affirmation.
    (h) The hearing official will issue a written opinion stating his 
or her decision, as soon as practicable, but not later than sixty (60) 
days after the date on which the request for such hearing was received 
by GSA. If the hearing official is unable to provide the debtor with a 
hearing and render a decision within 60 days after the receipt of the 
request for such hearing--
    (1) GSA will not issue a withholding order until the hearing is 
held and a decision rendered; or
    (2) If GSA had previously issued a withholding order to the 
debtor's employer, the Agency will suspend the withholding order 
beginning on the 61st day after the receipt of the hearing request and 
continuing until a hearing is held and a decision is rendered.
    (i) The written decision will include--
    (1) A summary of the facts presented;
    (2) The hearing official's findings, analysis and conclusions; and
    (3) The terms of any repayment schedules, if applicable.
    (j) The hearing official's decision will be the final Agency action 
for the purposes of judicial review under the Administrative Procedure 
Act (5 U.S.C. 701 et seq.).
    (k) In the absence of good cause shown, a debtor who fails to 
appear at a hearing scheduled pursuant to paragraph (e) of this 
section, or to provide written submissions within the time set by the 
hearing official, will be deemed to have waived his or her right to 
appear and present evidence.

[[Page 68764]]

Sec.  105-57.006  Wage garnishment order.

    (a) Unless GSA receives information it believes justifies a delay 
or cancellation of the withholding order, the Agency will send, by 
first class mail, overnight delivery service or hand delivery, a SF 
329A (Letter to Employer & Important Notice to Employer), a SF 329B 
(Wage Garnishment Order), a SF 329C (Wage Garnishment Worksheet), and a 
SF 329D (Employer Certification), to the debtor's employer--
    (1) Within 30 days after the debtor fails to make a timely request 
for a hearing (i.e., within 15 business days after the mailing of the 
notice described in Sec.  105-57.004(a) of this part); or
    (2) If a timely request for a hearing is made by the debtor, within 
30 days after a final decision is made by the hearing official to 
proceed with garnishment.
    (b) The withholding order sent to the employer under paragraph (a) 
of this section will contain the signature of, or the image of the 
signature of, the Administrator or his or her delegate. The order will 
contain only the information necessary for the employer to comply with 
the withholding order. Such information includes the debtor's name, 
address, and social security number, as well as instructions for 
withholding and information as to where payments are to be sent.
    (c) GSA will retain a copy of the evidence of service indicating 
the date of submission of the order. The evidence of service may be 
retained electronically so long as the manner of retention is 
sufficient for evidentiary purposes.


Sec.  105-57.007  Certification by employer.

    The employer must complete and return the SF 329D (Employer 
Certification) to GSA within the time frame prescribed in the 
instructions to the form. The certification will address matters such 
as information about the debtor's employment status and disposable pay 
available for withholding.


Sec.  105-57.008  Amounts withheld.

    (a) After receipt of the garnishment order issued under this part, 
the employer shall deduct from all disposable pay paid to the 
applicable debtor during each pay period the amount of garnishment 
described in paragraph (b) of this section. The employer may use the SF 
329C (Wage Garnishment Worksheet) to calculate the amount to be 
deducted from the debtor's disposable pay.
    (b) Subject to the provisions of paragraphs (c) and (d) of this 
section, the amount of garnishment will be the lesser of--
    (1) The amount indicated on the garnishment order up to 15 percent 
of the debtor's disposable pay; or
    (2) The amount set forth in 15 U.S.C. 1673(a)(2) (Restriction on 
Garnishment), which is the amount by which a debtor's disposable pay 
exceeds an amount equivalent to thirty times the minimum wage. See 29 
CFR 870.10.
    (c) When a debtor's pay is subject to withholding orders with 
priority, the following will apply:
    (1) Unless otherwise provided by Federal law, withholding orders 
issued under this part will be paid in the amounts set forth under 
paragraph (b) of this section and will have priority over other 
withholding orders which are served later in time. Notwithstanding the 
foregoing, withholding orders for family support will have priority 
over withholding orders issued under this part.
    (2) If amounts are being withheld from a debtor's pay pursuant to a 
withholding order served on an employer before a withholding order 
issued pursuant to this part, or if a withholding order for family 
support is served on an employer at any time, the amounts withheld 
pursuant to the withholding order issued under this part will be the 
lesser of--
    (i) The amount calculated under paragraph (b) of this section; or
    (ii) An amount equal to 25 percent of the debtor's disposable pay 
less the amount(s) withheld under the withholding order(s) with 
priority.
    (3) If a debtor owes more than one debt to GSA, the Agency may 
issue multiple withholding orders provided the total amount garnished 
from the debtor's pay for such orders does not exceed the amount set 
forth in paragraph (b) of this section.
    (d) An amount greater than that set forth in paragraphs (b) and (c) 
of this section may be withheld upon the written consent of the debtor.
    (e) The employer shall promptly pay to GSA all amounts withheld in 
accordance with the withholding order issued pursuant to this part.
    (f) An employer will not be required to vary its normal pay and 
disbursement cycles in order to comply with the withholding order.
    (g) Any assignment or allotment by an employee of his or her 
earnings will be void to the extent it interferes with or prohibits 
execution of the withholding order issued under this part, except for 
any assignment or allotment made pursuant to a family support judgment 
or order.
    (h) The employer will withhold the appropriate amount from the 
debtor's wages for each pay period until the employer receives 
notification from GSA to discontinue wage withholding. The garnishment 
order will indicate a reasonable period of time within which the 
employer is required to commence wage withholding, usually the first 
payday after the employer receives the order. However, if the first 
payday is within ten (10) days after the receipt of the garnishment 
order, the employer may begin deductions on the second payday.
    (i) Payments received through a wage garnishment order will be 
applied in the following order:
    (1) To outstanding penalties.
    (2) To administrative costs incurred by GSA to collect the debt.
    (3) To interest accrued on the debt at the rate established by the 
terms of the obligation under which it arose or by applicable law.
    (4) To outstanding principal.


Sec.  105-57.009  Exclusions from garnishment.

    GSA will not garnish the wages of a debtor who it knows has been 
involuntarily separated from employment until the debtor has been 
reemployed continuously for at least 12 months. The debtor has the 
burden of informing GSA of the circumstances surrounding an involuntary 
separation from employment.


Sec.  105-57.010  Financial hardship.

    (a) A debtor whose wages are subject to a wage withholding order 
under this part, may, at any time, request a review by GSA of the 
amount garnished, based on materially changed circumstances such as 
disability, divorce, or catastrophic illness which result in financial 
hardship.
    (b) A debtor requesting a review under paragraph (a) of this 
section shall submit the basis for claiming the current amount of 
garnishment results in a financial hardship to the debtor, along with 
supporting documentation.
    (c) If a financial hardship is found, GSA will downwardly adjust, 
by an amount and for a period of time agreeable to the Agency, the 
amount garnished to reflect the debtor's financial condition. GSA will 
notify the employer of any adjustments to the amounts to be withheld.


Sec.  105-57.011  Ending garnishment.

    (a) Once GSA has fully recovered the amounts owed by the debtor, 
including interest, penalties, and administrative costs consistent with 
the FCCS, the Agency will send the debtor's employer notification to 
discontinue wage withholding.
    (b) At least annually, GSA will review its debtors' accounts to 
ensure that

[[Page 68765]]

garnishment has been terminated for accounts that have been paid in 
full.


Sec.  105-57.012  Actions prohibited by the employer.

    An employer may not discharge, refuse to employ, or take 
disciplinary action against the debtor due to the issuance of a 
withholding order under this part. See 31 U.S.C. 3720D(e).


Sec.  105-57.013  Refunds.

    (a) If a hearing official, at a hearing held pursuant to Sec.  105-
57.005 of this part, determines that a debt is not legally due and 
owing to the United States, GSA will promptly refund any amount 
collected by means of administrative wage garnishment.
    (b) Unless required by Federal law or contract, refunds under this 
part will not bear interest.


Sec.  105-57.014  Right of action.

    GSA may sue any employer for any amount that the employer fails to 
withhold from wages owed and payable to an employee in accordance with 
Sec. Sec.  105-057.006 and 105-57.008 of this part, plus attorney's 
fees, costs, and if applicable, punitive damages. However, a suit may 
not be filed before the termination of the collection action involving 
a particular debtor, unless earlier filing is necessary to avoid 
expiration of any applicable statute of limitations period. For 
purposes of this part, ``termination of the collection action'' occurs 
when GSA has terminated collection action in accordance with the FCCS 
or other applicable standards. In any event, termination of the 
collection action will have been deemed to occur if GSA has not 
received any payments to satisfy the debt from the particular debtor 
whose wages were subject to garnishment, in whole or in part, for a 
period of one (1) year.

[FR Doc. 03-30407 Filed 12-9-03; 8:45 am]
BILLING CODE 6820-34-P