[Federal Register Volume 79, Number 78 (Wednesday, April 23, 2014)]
[Rules and Regulations]
[Pages 22593-22594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09053]

Rules and Regulations
                                                Federal Register

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Federal Register / Vol. 79, No. 78 / Wednesday, April 23, 2014 / 
Rules and Regulations

[[Page 22593]]


5 CFR Part 1639

Administrative Wage Garnishment

AGENCY: Federal Retirement Thrift Investment Board.

ACTION: Final rule.


SUMMARY: This regulation implements the authority established under the 
Debt Collection Improvement Act of 1996 (DCIA) for the Federal 
Retirement Thrift Investment Board (Agency) to order a non-Federal 
employer to withhold up to 15 percent of an employee's disposable 
income to pay a non-tax delinquent debt owed to the Agency or Thrift 
Savings Fund.

DATES: This rule is effective May 27, 2014 without further action, 
unless adverse comment is received by May 23, 2014. If adverse comment 
is received, the Federal Retirement Thrift Investment Board will 
publish a timely withdrawal of the rule in the Federal Register.

ADDRESSES: You may submit comments using one of the following methods:
     Mail: Office of General Counsel, Attn: James B. Petrick, 
Federal Retirement Thrift Investment Board, 77 K Street NE., 
Washington, DC 20002.
     Hand Delivery/Courier: The address for sending comments by 
hand delivery or courier is the same as that for submitting comments by 
     Facsimile: Comments may be submitted by facsimile at (202) 
    The most helpful comments explain the reason for any recommended 
change and include data, information, and the authority that supports 
the recommended change.

FOR FURTHER INFORMATION CONTACT: Ryan R. Montgomery at 202-942-1661.

SUPPLEMENTARY INFORMATION: The Agency administers the Thrift Savings 
Plan (TSP), which was established by the Federal Employees' Retirement 
System Act of 1986 (FERSA), Public Law 99-335, 100 Stat. 514. The TSP 
provisions of FERSA are codified, as amended, largely at 5 U.S.C. 8351 
and 8401-79. The TSP is a tax-deferred retirement savings plan for 
Federal civilian employees and members of the uniformed services. The 
TSP is similar to cash or deferred arrangements established for 
private-sector employees under section 401(k) of the Internal Revenue 
Code (26 U.S.C. 401(k)).


    In 1996, Congress enacted the Debt Collection Improvement Act (Pub. 
L. 104-134, 110 Stat. 1321-1358, approved April 26, 1996), which 
amended the Debt Collection Act of 1982. Section 31001(o) of the DCIA 
authorizes collection of Federal agency debt by administrative wage 
garnishment (section 31001(o) is codified at 31 U.S.C. 3720D). Wage 
garnishment is a legal process whereby an employer withholds amounts 
from an employee's wages and pays those amounts to the employee's 
creditor in satisfaction of a withholding order. The DCIA authorizes 
Federal agencies to withhold up to 15 percent of an employee's 
disposable income to pay a non-tax delinquent debt owed to the agency. 
Prior to the enactment of the DCIA, agencies were required to obtain a 
court judgment before garnishing the wages of non-Federal employees.
    The DCIA directed the Secretary of the Treasury to issue 
implementing regulations (see 31 U.S.C. 3720D(h)) on this subject. On 
May 6, 1998 (63 FR 25136), the Department of the Treasury published a 
final rule implementing the statutory administrative wage garnishment 
requirements at 31 CFR 285.11. Paragraph (f)(1) of 31 CFR 285.11 
provides that agencies prescribe regulations for the conduct of 
administrative wage garnishment hearings consistent with the section or 
adopt the section without change by reference.
    This final rule amends the Agency's regulations at 5 CFR part 1639 
to adopt 31 CFR 285.11 in its entirety. Specifically, the final rule 
establishes a new provision that contains a cross-reference to 31 CFR 

Overview of the Administrative Wage Garnishment Process

    Readers should refer to the Department of the Treasury regulation 
at 31 CFR 285.11 for details regarding the administrative wage 
garnishment procedures that are adopted by this rule. For the 
convenience of readers, the following presents a very brief overview of 
the rules and procedures codified at 31 CFR 285.11.
    1. Notice to debtor. At least 30 days before the Agency initiates 
garnishment proceedings, the Agency will give the debtor written notice 
informing him or her of the nature and amount of the debt, the 
intention of the Agency to collect the debt through deductions from 
pay, and an explanation of the debtor's rights regarding the proposed 
    2. Rights of debtor. The Agency will provide the debtor with an 
opportunity to inspect and copy records related to the debt, to 
establish a repayment agreement, and to receive a hearing concerning 
the existence or amount of the debt and the terms of a repayment 
schedule. A hearing must be held prior to the issuance of a withholding 
order if the debtor's request is timely received. For hearing requests 
that are not received in the specified timeframe, the Agency need not 
delay the issuance of a withholding order prior to conducting a 
hearing. The Agency may not garnish the wages of a debtor who has been 
involuntarily separated from employment until that individual has been 
reemployed continuously for at least 12 months. The debtor bears the 
responsibility of notifying the Agency of the circumstances surrounding 
an involuntary separation from employment.
    3. Hearing official. The Department of the Treasury regulations 
authorize the head of each agency to designate any qualified individual 
as a hearing official. This rule provides that any hearing required to 
establish the Agency's right to collect a debt through administrative 
wage garnishment will be conducted by a qualified individual selected 
by the Executive Director of the Agency. The hearing official is 
required to issue a written decision no later than 60 days after the 
request for a hearing is made. The hearing official's decision is the 
final agency action for purposes of judicial review.

[[Page 22594]]

    4. Employer's responsibilities. The Agency will send to the 
employer of a delinquent debtor a wage garnishment order directing that 
the employer pay a portion of the debtor's wages to the Agency. The 
employer is required to certify certain payment information about the 
debtor. Employers are not required to vary their normal pay cycles in 
order to comply with these requirements. Employers are prohibited from 
taking disciplinary actions against the debtor because the debtor's 
wages are subject to administrative garnishment.
    5. Garnishment amounts. As provided in the DCIA, no more than 15% 
of the debtor's disposable pay for each pay period may be garnished. 
Special rules apply to calculating the amount to be withheld from a 
debtor's pay that is subject to multiple withholding orders. A debtor 
may request a review by the Agency of the amount being garnished under 
a wage garnishment order based on materially changed circumstances, 
such as disability, divorce, or catastrophic illness, which result in 
financial hardship.

Administrative Procedure Act Requirements

    The Agency has determined that implementation of this rule without 
prior notice and the opportunity for public comment is warranted 
because this rule is one of agency procedure and practice and therefore 
is exempt from notice and comment rulemaking requirements under the 
Administrative Procedure Act (APA) at 5 U.S.C. 553(b)(A) and (B).
    This final rule parallels the existing operational regulations of 
other agencies to effectuate the collection of non-tariff and nontax 
debts to implement 31 U.S.C. 3711. Because this rule parallels 
existing, long-standing rules that have already been subject to APA 
notice and comment procedures, we believe that publishing this rule 
with the usual notice and comment procedures is unnecessary. 
Accordingly, the Agency has determined that prior notice and public 
comment procedures would be unnecessary pursuant to 5 U.S.C. 553(b)(B).

Regulatory Flexibility Act

    Because the Agency has determined that it may issue these rules 
without public comment, the Agency is also not required to publish any 
initial or final regulatory flexibility analysis under the Regulatory 
Flexibility Act as part of such action. See 5 U.S.C. 603(a), 604(b).

Paperwork Reduction Act

    I certify that these regulations do not require additional 
reporting under the criteria of the Paperwork Reduction Act.

Unfunded Mandates Reform Act of 1995

    Pursuant to the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 602, 
632, 653, 1501-1571, the effects of this regulation on state, local, 
and tribal governments and the private sector have been assessed. This 
regulation will not compel the expenditure in any one year of $100 
million or more by state, local, and tribal governments, in the 
aggregate, or by the private sector. Therefore, a statement under 1532 
is not required.

Submission to Congress and the General Accounting Office

    Pursuant to 5 U.S.C. 810(a)(1)(A), the Agency submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives, and the Comptroller General of the 
United States before publication of this rule in the Federal Register. 
This rule is not a major rule as defined at 5 U.S.C. 804(2).

List of Subjects in 5 CFR Part 1639

    Claims, Government employees, Income taxes, Wages.

Gregory T. Long,
Executive Director, Federal Retirement Thrift Investment Board.

    For the reasons stated in the preamble, the Agency amends 5 CFR 
chapter VI as follows:


1. Amend the authority citation for part 1639 by revising it to read as 

    Authority: 5 U.S.C. 8474 and 31 U.S.C. 3711, 3716, 3720A, and 

2. Revise Sec.  1639.1 to read as follows:

Sec.  1639.1  Authority.

    The regulations of this part are issued under 5 U.S.C. 8474 and 31 
U.S.C. 3711, 3716, 3720A, and 3720D.

3. Add subpart E to read as follows:

Subpart E--Administrative Wage Garnishment

Sec.  1639.60  Administrative wage garnishment.

    (a) General. The Board may use administrative wage garnishment to 
collect debts from non-Federal employees in accordance with the 
requirements of 31 U.S.C. 3720D and 31 CFR 285.11. This subpart adopts 
and incorporates all of the provisions of 31 CFR 285.11 concerning 
administrative wage garnishment, including the hearing procedures 
described in 31 CFR 285.11(f). This section does not apply to 
collection of debt by Federal salary offset, under 5 U.S.C. 5514, the 
process by which the Board collects debts from the salaries of Federal 
    (b) [Reserved]

[FR Doc. 2014-09053 Filed 4-22-14; 8:45 am]