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Training For Hawaii Garnishment Law Requirements

What Is A Garnishment?

A wage garnishment is any legal or equitable procedure through which some portion of a person's earnings is required to be withheld by an employer for the payment of a debt. The six basic types of garnishments are child support, federal, state, or local levies, creditor garnishments, and student loans, with the largest amount of garnishments being for child support.

Hawaii Garnishment Law Requirements

Hawaii employers that receive a wage garnishment must comply with Hawaii garnishment requirements as well as applicable federal law. Hawaii uses a distinctive graduated formula for ordinary wage garnishments that generally permits withholding of 5% of the first $100 of monthly disposable wages, 10% of the next $100, and 20% of amounts above $200. Hawaii's garnishment statutes also provide procedures for continuing wage withholding, employer disclosures, and successive garnishments when an employee changes jobs.

Hawaii Wage Garnishment Overview

In Hawaii, garnishment may occur before or after judgment depending on the circumstances and applicable legal process. A creditor may serve garnishment process on an employer that owes wages or other compensation to a debtor.

Hawaii's primary garnishment provisions are found in Chapter 652 of the Hawaii Revised Statutes. The statute defines wages broadly for garnishment purposes to include wages, salary, stipend, commissions, annuity payments, and net income under a trust.

Hawaii Wage Garnishment Limits

For an ordinary garnishment, Hawaii Revised Statutes § 652-1 provides a graduated withholding formula based on the employee's disposable wages:

• 5% of the first $100 of disposable wages per month
• 10% of the next $100 of disposable wages per month
• 20% of all disposable wages above $200 per month

The statute also provides for an equivalent portion of the formula when wages are paid weekly. Employers should use the calculation applicable to the employee's actual wage-payment schedule and the garnishment process received.

Disposable Wages

Hawaii's garnishment statute applies its withholding formula to wages remaining after deduction of amounts required by law to be withheld.

For garnishment purposes, Hawaii includes wages, salary, stipend, commissions, annuity payments, and net income under a trust within the statutory definition of wages.

Employers should therefore determine the employee's applicable disposable wages before calculating the amount subject to garnishment rather than applying the statutory percentages directly to gross compensation.

Hawaii Garnishment Process and Employer Response

When an employer is served with garnishment process, the employer becomes the garnishee and must secure the applicable garnishee fund and comply with the legal process.

Hawaii Revised Statutes § 652-1 requires the garnishee to secure certain property, debts, money, and the applicable portion of wages in its possession or owed to the debtor at the time of service. After judgment, wages may continue to be garnished at the statutory rate. Employers should therefore:

• Record the date the garnishment process is received
• Review the summons, judgment, and accompanying documents immediately
• Verify whether the named judgment debtor is an employee
• Determine the employee's disposable wages for the applicable pay period
• Apply the Hawaii garnishment formula
• Consider any applicable federal garnishment limitation or exception
• Complete the required garnishee disclosure or return
• Withhold the amount required by the garnishment
• Remit withheld wages as required by the court or garnishment process
• Continue withholding while the garnishment remains effective
• Maintain records of the garnishment, calculations, withholding, payments, and related correspondence

Garnishee Disclosure Requirements

Hawaii Revised Statutes § 652-1 provides that a garnishee may file a return under oath containing a full disclosure with the court issuing the summons on or before the return day. A copy of the return must also be served on the plaintiff or the plaintiff's attorney by the return day.

The disclosure addresses whether the employer has property belonging to the debtor, whether the employer is indebted to the debtor, and whether the employer has money belonging to the debtor in its possession for safekeeping.

Employers should ensure that garnishee disclosures are complete and accurate and should retain copies of all documents submitted to the court and creditor.

Post-Judgment Wage Garnishment

After judgment, Hawaii Revised Statutes § 652-1 allows wages to be garnished at the statutory rate. In a district court action, a creditor may, 10 days after judgment, file a certified copy of the judgment and an affidavit showing the amount due and unpaid with the employer. The employer must then either file a disclosure within one week or withhold the applicable amounts from the judgment debtor's wages and pay them to the judgment creditor.

Employers should carefully review the documents received to determine whether the garnishment is based on a court summons or the post-judgment affidavit procedure.

Continuing Wage Garnishment

Hawaii Revised Statutes § 652-3 provides that wage withholding continues until the action against the debtor has been finally determined and any final judgment has been fully paid with legal interest. After judgment, Hawaii Revised Statutes § 652-4 provides for continued sequestration and payment of the required percentage of wages from week to week or month to month until the judgment and interest are fully paid or the employee's relationship with the garnishee ends.

This means that an employer generally must continue withholding from subsequent paychecks while the garnishment remains effective rather than treating the garnishment as a one-time deduction.

Changing Employers

Hawaii Revised Statutes § 652-5 addresses the situation in which a judgment debtor leaves the employment of a garnishee before the judgment has been fully paid and begins working for another employer.

The judgment creditor may provide the new employer with a certified copy of the judgment and an affidavit showing the remaining unpaid balance. The new employer then proceeds with the same statutory percentage of wages until the balance, including legal interest, is fully paid or the employment ends.

Successive Garnishments and Priority

Hawaii law recognizes successive wage garnishments and provides that a garnishment involving a new employer can have the same legal standing as an original garnishment. Case law cited in the Hawaii Revised Statutes indicates that priority is determined according to the time the garnishment is received by the garnishee.

Employers should maintain accurate records showing when each garnishment is received and should review existing garnishments before processing a subsequent order.

Prejudgment Garnishment

Hawaii permits prejudgment garnishment in certain circumstances, but additional procedural protections apply. Hawaii Revised Statutes § 652-1.5 generally requires a creditor seeking prejudgment garnishment to submit an application, an affidavit establishing facts supporting the probable validity of the claim, an order for a hearing, and related process.

The court may determine whether the garnishment should be granted and may find that some or all of the debtor's property is exempt from execution. Hawaii law also permits the court or a judge to authorize issuance of prejudgment garnishment process without a hearing under specified circumstances.

Garnishee Responsibilities and Liability

Once a garnishment becomes effective, the employer has a duty to secure and pay the applicable garnishee fund. Hawaii Revised Statutes § 652-2 provides that if the garnishee does not pay wages or other amounts secured by the garnishment when properly demanded, the garnishee may become liable to satisfy the judgment from its own estate to the extent provided by law.

Hawaii law also provides protection to an employer that acts in good faith when making deductions and payments pursuant to the garnishment process.

Employee Exemptions and Objections

Hawaii law provides procedures for determining whether property or wages are exempt from execution. Prejudgment garnishment procedures specifically require the court to consider exemptions asserted by the debtor.

Employees may also have protections under other state or federal exemption laws depending on the source of the funds or the type of obligation.

Employers should not independently determine whether an employee's exemption claim is valid unless the applicable legal process requires the employer to make that determination. Payroll should follow the garnishment and any subsequent court order or instruction affecting the withholding.

Child Support and Family Support Garnishments

Child support and spousal support withholding orders are subject to special federal and Hawaii requirements and generally receive priority over ordinary consumer-debt garnishments.

Federal law generally permits withholding for support obligations of up to 50% or 60% of disposable earnings depending on the employee's family circumstances, with an additional 5 percentage points potentially available when the support obligation is more than 12 weeks in arrears.

Employers processing child support or other family-support withholding orders should follow the specific order and apply all applicable federal and Hawaii requirements rather than automatically applying the ordinary Chapter 652 garnishment formula.

Tax Garnishments

Federal and state tax collection proceedings are subject to specialized rules that may differ from an ordinary judgment-creditor garnishment.

Federal tax levies generally have their own exemption and withholding calculations, while Hawaii tax collection actions may be governed by separate state procedures. Employers should follow the instructions provided by the applicable taxing authority rather than automatically applying the ordinary Chapter 652 wage-garnishment formula.

Bankruptcy and Other Specialized Orders

Bankruptcy proceedings, federal tax levies, child support orders, and certain other obligations are subject to specialized federal or state rules. The ordinary Hawaii garnishment formula should not automatically be applied to every type of withholding order.

Employers should review the issuing authority's instructions and determine which federal and Hawaii requirements apply before processing specialized withholding orders.

Federal Garnishment Limits Still Apply

Hawaii employers must comply with applicable federal garnishment protections in addition to Hawaii law. The federal Consumer Credit Protection Act generally limits ordinary consumer-debt garnishments to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum hourly wage.

Hawaii's statutory formula can produce a lower withholding amount than the federal limit, particularly at lower income levels. Employers should therefore apply the Hawaii formula and ensure that the resulting withholding does not exceed any applicable federal limitation.

Different federal limits apply to child support, certain tax obligations, bankruptcy, and other specified debts. Employers should identify the type of obligation before determining the amount that may legally be withheld.

Protection Against Employee Retaliation

Federal law generally prohibits an employer from discharging an employee because the employee's earnings have been garnished for any one indebtedness.

Employers should not retaliate against an employee because of a garnishment or alter the employee's normal compensation or pay schedule for the purpose of avoiding the garnishment.

When to Stop Withholding

Hawaii law generally requires wage withholding to continue until the applicable judgment has been fully paid with legal interest or the employee's relationship with the garnishee ends, subject to the terms of the specific garnishment and applicable court orders.

Employers should not stop withholding solely because an employee states that the underlying debt has been paid. Payroll should obtain appropriate documentation from the court, creditor, or other authorized source before terminating a garnishment.

Important Employer Compliance Point

A Hawaii wage garnishment should not be treated as a simple instruction to withhold a fixed percentage of an employee's paycheck. Payroll must identify the type of garnishment, determine disposable wages, apply Hawaii's graduated withholding formula, consider applicable federal limits and priority obligations, complete required garnishee disclosures, and remit funds according to the legal process.

For an ordinary Hawaii garnishment, the statutory formula generally provides for withholding of 5% of the first $100 of disposable wages per month, 10% of the next $100, and 20% of amounts above $200, with an equivalent weekly calculation available under the statute.

Hawaii Garnishment Records

Employers should maintain records of all garnishment orders, dates of service, employee notices, disposable-wage calculations, amounts withheld, payments made, garnishee disclosures, and correspondence concerning the garnishment.

Accurate records are particularly important when an employee has multiple garnishments, a support withholding order, an exemption claim, a change in employment, or a court proceeding affecting the employer's withholding obligations.

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