Payroll Detective: The Case of the Mysterious Deduction

by Victoria Dolan

How to Spot the Difference Between a Wage Garnishment and a Voluntary Wage Assignment (and Stay on the Right Side of California Labor Law)

Welcome, Employers –

Put on your trench coat and grab your magnifying glass—we’re diving into the shadowy world of payroll deductions. As a vigilant Payroll Detective, your mission is to solve a crucial mystery:

Is this a legally enforceable wage garnishment,

or just a voluntary wage assignment in disguise?

Making the wrong deduction can land your company in hot water. So, let’s crack the case—and help you avoid turning a paycheck into a crime scene.

Wage Garnishment vs. Voluntary Wage Assignment: Who’s Who?

Think of wage deductions like characters in a noir film:

Wage Garnishment is the court-appointed sheriff. It struts in with an official court order, signed and sealed, leaving no room for negotiation. Garnishments are typically issued for:

  • Unpaid debts (credit cards, loans)
  • Unpaid taxes
  • Child/spousal support (handled separately)

Wage Assignment, on the other hand, is the slick-talking salesman. It looks official, but it’s based on a private agreement between the employee and a creditor. In California, under Labor Code § 300, these are only enforceable if very specific conditions are met.

Section 300: The Legal Labyrinth of VOLUNTARY Wage Assignments

Now here’s where things get tricky.

This is a private agreement between an employee and a creditor. It might look official, but under California Labor Code Section 300, you cannot honor it unless very specific requirements are met.

As the employer, here’s what you need to verify before making a single deduction for a voluntary wage assignment:

  1. Separate, Signed Written Document
    • The assignment must be its own document, not hidden in fine print.
    • It must clearly identify the transaction (e.g., a specific loan or credit agreement).
  1. Written Consent/Declaration Requirements
    • If the employee is unmarried and over 18, a written statement from the employee confirming this must be attached.
    • If married: The spouse must provide written consent, unless legally separated (then attach a declaration explaining the separation).
    • If a minor: A parent or guardian must sign off.
  1. No Duplicate Assignments
    • A written statement must confirm there are no other wage assignments in place for the same debt.
  1. Proper Filing with the Employer
    • The entire packet—assignment, declarations, and an itemized debt statement—must be notarized and formally filed with your company.
  1. No Conflicting Court Orders
    • At the time of filing, there must be no other earnings withholding orders or assignments active for that employee.

Additionally, when processing valid wage assignments, keep these things in mind:

  • Maximum Deduction Limit: You may only withhold up to 50% of wages under an assignment.
  • Employer Protection Clause: While you must ensure all of the requirements are met, you are allowed to take the documents presented at face value and rely on the information contained in them as factual.
  • Right to Revoke: Employees can revoke a wage assignment at any time, but you must receive written notice for it to take effect.

A Final Plot Twist: Criminal Penalties?

Yes—under California law, ignoring these rules will result in unauthorized deductions opening you up to claims for improper withholding, potentially costing you back pay, penalties, or even criminal charges. Don’t play payroll roulette. Stick to verified deductions only.

Closing The Case.

Employers: You are not debt collectors. You’re not referees in civil disputes. You’re the stewards of your employees’ hard-earned wages.

Before processing any wage deduction outside a court order, scrutinize it with the eye of a seasoned detective. When in doubt, consult counsel. Because if you honor a flawed assignment, your employee might turn the tables and serve you with a claim for improper withholding.

So next time a deduction request comes across your desk, ask yourself: “Is this a lawful garnishment, or just a slick imposter trying to sneak into my payroll?”

Moral of the story: Stay sharp. Stay compliant. Case closed!