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Published: 2008-03-26

Fact Sheet: Commercial Debt Garnishment From Federal Civilian Employees



Federal law now authorizes legal process against the pay of Federal civilian employees for commercial obligations in accordance with State law. In this discussion, the term "commercial" obligations and garnishments do not include those for child support or alimony. Civilian employees are subject to garnishment for child support and alimony obligations under 42 U.S.C. 659.

The Hatch Act Amendments of 1993, enacted October 6, 1993, require the United States to honor garnishment orders or similar legal processes issued for the enforcement of commercial legal obligations of Federal civilian employees. The public law is codified at 5. U.S.C. 5520a and became effective on February 3, 1994. The enabling regulation is 5 C.F.R. 582.

As the paying agency for most of the civilian employees of the Department of Defense, the Defense Finance and Accounting Service (DFAS) is responsible for processing the majority of these commercial garnishments.

Federal Regulations require that legal process be served on the designated agent. The DFAS-Cleveland Center (DFAS-CL) is the designated agent for service of process for the Department of Defense (DOD). Creditors may accomplish service of legal process by mail, fax or personal service. Valid service is not accomplished until the legal process is served on DFAS-CL at the following address:

Defense Finance and Accounting Service
Cleveland Center, Code L
PO Box 998002
Cleveland, Ohio 44199-8002
(216) 522-5301 (Customer Service)
The garnishment order or accompanying documents must provide sufficient identifying information in order to enable processing by DFAS-CL. Parties seeking garnishment actions must provide the following information concerning the employee: (1) Full Name; (2) Social Security Number and (3) the Component of the agency for which the employee works, if known. Creditors should also provide, if available, the employee's official duty station or worksite and home address. If the information submitted is insufficient to identify the employee, the documents will be returned with an explanation of the deficiency.

As soon as possible, but not later than fifteen (15) calendar days after the date of valid service of the legal process, DFAS will send to the employee, at the employee's duty station or last known home address, a written notice that such process has been served and a copy of the legal process.

DFAS will respond to properly served legal process within thirty (30) calendar days after receipt, or within such longer period as may be prescribed by applicable state or local law. Any challenge to the validity of the underlying court order must be made in court by the employee or the employee's private attorney. DFAS does not represent the employee and will not litigate or otherwise resolve such disputes.

Under 15 U.S.C. 1673(a)(1), collection for commercial debt is limited to a maximum of twenty-five (25%) percent of the employee's disposable earnings. However, State limitations prevail when they provide a maximum collection percentage that is less than twenty-five (25%) percent.

An employee's disposable earnings are defined as pay subject to garnishment such as wages, salary, bonuses and incentive pay, less authorized deductions. A complete list of the payments included in the definition of "disposable earnings" is found at 5 C.F.R. section 582.103. The Federal Regulation, 5 C.F.R. 582.103(a) specifies the amounts that are excluded from the amount subject to garnishment. These include amounts owed to the United States, Federal, State and local income tax withholding, Social Security withholding (FICA) and deductions for health insurance premiums.

In the event DFAS is served with multiple garnishments they will be satisfied in priority based on the time of service. Orders for child support and alimony, including orders for child support and alimony arrearages, have priority over any commercial garnishment. If there are no disposable earnings available to comply with the court order due to a previously served order for child support or alimony, the legal process will be returned without action. In the case where there are no disposable earnings available to comply with the court order due to previously served commercial garnishments, the garnishment will be held by DFAS and processed when funds become available provided the terms of the order allow for such delayed processing.

In accordance with the statute, an administrative fee of $75.00 will be assessed against the employee to offset the cost of processing the garnishment. This fee covers the costs directly related to the processing of an order and will be deducted from the employee at the time the garnishment is processed.

Almost all DOD civilian employees are paid by DFAS on a bi-weekly basis. Therefore, DFAS will make payments on a bi-weekly basis. Variations in the pay cycle cannot be accommodated and there is no requirement to do so under either the statute or the enabling regulation. Furthermore, there are no means by which the pay system can escrow payments or institute a "Withhold and Do Not Remit" order. Such orders will be returned without action. The pay system also does not allow for prorated payments.

The Office of Personnel Management (OPM) published an "Application for Federal Employee Commercial Garnishment", Optional Form 311. This form is designed to be used by creditors to facilitate the Federal government's compliance with commercial garnishment orders as required by 5 U.S.C. 5520a.

This is a voluntary form and does not replace the garnishment procedures required by State or local law. However, by providing information in a uniform manner, the form simplifies the actions which must be taken by Federal agencies in order to comply with a commercial garnishment order.

Please include a return address on any correspondence, as well as the mailing envelope. Questions concerning the commercial garnishment process can be directed to the Customer Service at (216) 522-5301.

Garnishment Operations Facsimile (FAX) Information:
Fax Phone Number: Commercial (216) 522-6960 or DSN 580-6960.

In improving the processes in the Garnishment Operations we are now using a fax gateway directly into our Electronic Document Management System. To ensure your document is processed in a timely and efficient manner you must include the following information on the fax document and follow the additional guidance provided:

  • Member/Employee Social Security Number (SSN) - Court Orders/Documents will not be processed if the SSN is not on the document
  • Return Phone Number
  • Return Fax Number
  • Ensure original documents are clear and legible
  • In each fax transmission, include only correspondence for one member or employee (if you have multiple documents for one member, they can be sent on one fax transmission)

Last updated: March 12, 1999 at 07:17