APA is taking issue with direction the Texas Office of the Attorney General (OAG) provides to employers regarding the collection of child support from tip income. In a letter to the state’s Child Support Division, APA requested that the OAG review and clarify the information provided to employers in its Child Support Handbook for Employers and in an answer to a Frequently Asked Question (FAQ) posted to the OAG’s website. “Our understanding of the rules governing wage garnishments and the federal Consumer Credit Protection Act leads us to believe the information … is contrary to federal law,” APA said.
The OAG directs employers to include all employee-reported tips when calculating disposable income subject to withholding for child support, citing the U.S. Tax Code’s definition of income. APA argues that the state should be following the advice of the U.S. Department of Labor’s (DOL) Wage and Hour Division, which enforces federal garnishment law through the Consumer Credit Protection Act.
According to the DOL, tips are generally not earnings subject to garnishment. The only tips that may be subject to garnishment are those tips used as a tip credit. The information the OAG provides “does not acknowledge this distinction,” APA said.
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