COMPTROLLER'S SEAL STATE OF CONNECTICUT

STATE OF CONNECTICUT

NANCY WYMAN
COMPTROLLER
OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MARK OJAKIAN
DEPUTY COMPTROLLER

MEMORANDUM NO. 2006-43

December 20, 2006

TO THE HEADS OF ALL STATE AGENCIES

Attention:   Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers
Subject:   Increase of State Minimum Wage and its Impact on CGS 52-361a

I. PURPOSE

This memorandum is issued for informational purposes. With the implementation of the Core-CT system, the system does the calculation of the garnishment deduction. Changes will be made centrally with the implementation of the appropriate tax bulletin.

II. AUTHORITY

A. Public Act 05-32 amended CGS 31-58, subsection (j) to increase the state minimum wage to $7.65 per hour effective January 1, 2007.

B. Section 52-361a, subsection (f), of the Connecticut General Statutes provides that:

“(f) Amount subject to levy. The maximum part of the aggregate weekly earnings of an individual which may be subject under this section to levy or other withholding for payment of a judgement is the lesser of (1) twenty-five per cent of his disposable earnings for that week, or (2) the amount by which his disposable earnings for that week exceed forty times the higher of (A) the minimum hourly wage prescribed by Section 6(a)(1) of the Fair Labor Standards Act of 1938, USC Title 29, Section 206(a)(1), or (B) the full minimum fair wage established by subsection (j) of section 31-58, in effect at the time the earnings are payable.”

C. “Disposable earnings” is the balance remaining after the following deductions have been made from gross wages: FICA, federal income tax, state income tax, normal retirement contributions, union dues or fees, group life insurance premiums, health insurance premiums, maintenance, and (if applicable) voluntary or court-ordered family or welfare support, federal tax levies, and state income tax deductions authorized pursuant to CGS Section 12-34b.

All other deductions (savings bonds, deferred compensation, etc.) are optional and are not permissible in the calculation of disposable earnings.

D. Federal and State Minimum Wages

1. The federal minimum wage is $5.15 per hour.
 
2. Public Act 05-32 increases the minimum fair wage in Connecticut to $7.65 per hour effective January 1, 2007.

III. COMPUTATION TO DETERMINE AGGREGATE DISPOSABLE EARNINGS SUBJECT TO GARNISHMENT

Subsection (f) of CGS Section 52-361a provides that the maximum part of the aggregate disposable earnings subject to garnishment may not exceed the lesser of:

A. 25% of the employee's disposable earnings for the week.

B. The amount by which his/her disposable earnings exceed forty (40) times the Connecticut state minimum wage; i.e., 40 times $7.65 per hour equals $306.00 per week ($612.00 bi-weekly).

C. The amount by which his/her disposable earnings exceed forty (40) times the federal minimum wage; i.e., 40 times $5.15 per hour equals $206.00 per week ($412.00 bi-weekly).

EXAMPLE: 

       BI-WEEKLY AMOUNTS
  Method A    Method B    Method C
GROSS WAGES    $1,000.00    $1,000.00    $1,000.00
Less: Allowable Deductions    320.00    320.00    320.00
DISPOSABLE EARNINGS    $ 680.00    $ 680.00    $ 680.00
EXCLUSIONS      
Method A:      
75% of Disposable Earnings $ 510.00    
Method B:      
80 times State Hourly Minimum _________ $ 612.00  
Method C:      
80 times Federal Hourly Minimum _________ _________ $ 412.00
AGGREGATE DISPOSABLE
EARNINGS SUBJECT TO
GARNISHMENT
$ 170.00 $ 68.00 $ 268.00

NOTE

Since it is the lesser aggregate disposable earnings which are subject to garnishment, the following rules-of-thumb will apply for current rates;

Disposable Earnings:

$789.34 or more    Use Method A
$789.33 or less    Use Method B

Method C, based on Federal minimum wage, is reflected for comparison purposes only and will not be applicable as long as the Federal minimum wage is less than the State minimum wage.

Where an employee is subject to a garnishment for child support or federal or state income taxes, which are given a priority pursuant to state and federal law, the October 20, 2003 memorandum from the Comptroller's Payroll Services Division should be used as guidance. Please note that as to employees subject to a withholding order for support and the garnishment for a non-tax debt, the amount of disposable income garnished cannot exceed 25%.

IV. GENERAL

This memorandum is effective January 1, 2007 and supersedes Comptroller's Memorandum No. 2005-40 dated December 5, 2005.

Please direct questions to the Office of the State Comptroller as follows:

Statutory Impact/Computations:

Fiscal Policy Division, (860) 702-3440;

Payroll Procedures:

Payroll Services Division, (860) 702-3452, (860) 702-3454 or (860) 702-3467.


NANCY WYMAN
STATE COMPTROLLER

NW:CH

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