State Law
California SB 1477: Heightened Disposable Earnings Exemptions
California significantly increases the wage floor exempt from creditor garnishments by tying the exemption formula to 48 times the state minimum wage.
Under California Senate Bill 1477, the calculation for consumer debt garnishments was modified from the federal 30× formula to an enhanced 48× minimum wage multiplier. Furthermore, the maximum deduction rate drops from 25% to 20% of disposable earnings exceeding the floor. For employers with workers in California, payroll algorithms must be updated to ensure compliance with the local living wage escalation schedule.
Employer Compliance Checklist:
- Verify whether current employees operate, reside, or have active writs in this jurisdiction.
- Audit HCM wage deduction caps to guarantee alignment with shifting disposable pay exemptions.
- Connect State Disbursement Units to the Federal e-IWO portal to eliminate 10-day postal mail lag.
Published by Global Pay Compliance Desk (Minneapolis)
Speak with a Garnishment Specialist →