Approximately 7.2 percent of U.S. employees have their wages garnished, according to a new study released Monday by the payroll giant ADP, with the percentage rising to 10 percent for those who earn between $25,000 and $39,999 per year.

The study, conducted by the ADP Research Institute, found that the reason for approximately 40 percent of the wage garnishment is child support, followed by about 20 percent for tax debts.

The highest garnishment rate is 10.5 percent among employees age 35 to 44, which is typically the age of peak debt load, child rearing and divorce. 

A lack of data about current trends in U.S. wage garnishments prompted ADP to analyze aggregate, anonymous payroll data from 2013 for 13 million employees ages 16 and older.  The study identified demographic information of the employees whose wages are garnished, such as gender, income, geographic location and industry to assess possible reasons behind these findings.

Researchers found that the manufacturing sector has the highest percentage of companies with garnishments at 48 percent, while the Midwest has the highest garnishment rate at 8.9 percent of employees.  This disparity suggests a possible relationship between garnishments and blue- and white-collar job categories.  There’s a higher concentration of manufacturing companies located in the Midwest, which could explain the geographic disparity.

The Northeast had the lowest rate of wage garnishment, at 4.9 percent.  This disparity may be related to a higher concentration of manufacturing companies being located in the Midwest. 

The manufacturing sector’s 48 percent was followed by the transportation and utilities industry at 42 percent.  Companies in the professional and business services, financial activities, and education and health services industries have the lowest rate at 23 percent for each segment.  The disparity suggests a possible relationship between garnishment and blue- and white-collar job categories.

Wage garnishments can have a significant impact on both employees and employers, according to the study.  Employees who have their wages garnished can find it humiliating and stressful, often resulting in decreased workplace productivity and motivation.  Employers may be exposed to financial risk when their employees’ wages are garnished by becoming liable to creditors for an employee judgment if they do not assist with the garnishment appropriately. 

“We conducted this study in order to paint a clearer picture of current garnishment trends among U.S. workers,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute, in a statement.  “ADP’s robust data set allowed us to bring some clarity to a process that affects a large number of people, the scope of which has been poorly understood.”

For nearly all categories of garnishments, the rates are similar for men and women with the exception of child support: 5.8 percent of male workers versus only 0.6 percent of females. This finding may reflect that more women than men have physical custody of children, and men are more likely to be required to pay child support.

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