(a) Where an employer is legally obliged, as by order of a court of
competent and appropriate jurisdiction, to pay a sum for the benefit or
credit of the employee to a creditor of the employee, trustee, or other
third party, under garnishment, wage attachment, trustee process, or
bankruptcy proceeding, deduction from wages of the actual sum so paid is
not prohibited: Provided, That neither the employer nor any person
acting in his behalf or interest derives any profit or benefit from the
transaction. In such case, payment to the third person for the benefit
and credit of the employee will be considered equivalent, for the
purposes of the Act, to payment to the employee.
(b) The amount of any individual's earnings withheld by means of any
legal or equitable procedure for the payment of any debt may not exceed
the restriction imposed by section 303(a), title III, Restriction on
Garnishment, of the Consumer Credit Protection Act (82 Stat. 163, 164;
15 U.S.C. 1671 et seq.). The application of title III is discussed in
part 870 of this chapter. When the payment to a third person of moneys
withheld pursuant to a court order under which the withholdings exceeds
that permitted by the CCPA, the excess will not be considered equivalent
to payment of wages to the employee for purpose of the Fair Labor
Standards Act.
[35 FR 10757, July 2, 1970]
