Administrative Wage Garnishment Procedures, 74918-74921 [2016-26093]
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Federal Register / Vol. 81, No. 209 / Friday, October 28, 2016 / Rules and Regulations
By direction of the Commission.
Donald S. Clark,
Secretary.
National Commodity Specialist
Division, Regulations and Rulings,
Office of Trade, 201 Varick Street, Suite
501, New York, New York 10014.
E-rulings procedures will remain the
same and are not affected by the change
in office location.
[FR Doc. 2016–25725 Filed 10–27–16; 8:45 am]
BILLING CODE 6750–01–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
19 CFR Part 177
[CBP Dec. 16–19]
RIN 1515–AE17
New Mailing Address for the National
Commodity Specialist Division,
Regulations and Rulings, Office of
Trade; Technical Correction
U.S. Customs and Border
Protection, Department of Homeland
Security.
ACTION: Final rule.
AGENCY:
This document amends the
U.S. Customs and Border Protection
(CBP) regulations to reflect that the mail
room servicing the Director, National
Commodity Specialist Division,
Regulations and Rulings, in the Office of
Trade, has relocated within New York,
and a new location has been established
to receive non-electronic
correspondence. E-rulings procedures
will remain the same and are not
affected by the change in office location.
DATES: Final rule effective October 28,
2016.
SUMMARY:
Steven Mack, Director, National
Commodity Specialist Division,
Regulations and Rulings, Office of
Trade, (646) 733–3001.
SUPPLEMENTARY INFORMATION:
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Background
On January 14, 2016, Customs and
Border Protection (CBP) published a
notice in the Federal Register (81 FR
1960), announcing a temporary change
of office location effective January 28,
2016, due to the relocation of the
National Commodity Specialist Division
(NCSD). In that notice, CBP stated that
it would update its regulation once the
relocation of the NCSD is complete. The
relocation is now completed and a
permanent address is established. As
such, CBP is revising section 177.2(a) of
title 19 of the Code of Federal
Regulations (19 CFR 177.2(a)) to reflect
the new mailing address. Starting
October 28, 2016, all non-electronic
correspondence to the NCSD should be
sent to the following address: Director,
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Executive Order 12866
The amendment does not meet the
criteria for a ‘‘significant regulatory
action’’ as specified in Executive Order
12866.
Regulatory Flexibility Act
Because this document is not subject
to the notice and public procedure
requirements of 5 U.S.C. 553, it is not
subject to the provisions of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.).
Signing Authority
This document is limited to a
technical correction of the CBP
regulations. Accordingly, it is being
signed under the authority of 19 CFR
0.1(b)(1).
List of Subjects in 19 CFR Part 177
Administrative practice and
procedure, Customs duties and
inspection, Government procurement,
Reporting and recordkeeping
requirements.
FOR FURTHER INFORMATION CONTACT:
VerDate Sep<11>2014
Inapplicability of Notice and Delayed
Effective Date Requirements
Because the technical correction set
forth in this document merely updates
a mailing address, CBP finds that good
cause exists for dispensing with notice
and public procedure as unnecessary
under 5 U.S.C. 553(b)(A). For this same
reason, pursuant to 5 U.S.C. 553(d)(3),
CBP finds that good cause exists for
dispensing with the requirement for a
delayed effective date.
Amendments to the Regulations
For the reasons set forth above, part
177 of the CBP Regulations (19 CFR part
177) is amended as set forth below.
PART 177—ADMINISTRATIVE
RULINGS
1. The general authority citation for
part 177 continues to read as follows:
■
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202
(General Note 3(i), Harmonized Tariff
Schedule of the United States), 1502, 1624,
1625.
§ 177.2
[Amended]
2. In § 177.2, paragraph (a), the third
sentence is amended by removing the
words ‘‘New York, New York 10119,
Attn: Classification Ruling Requests,
New York, New York 10048, or to any
■
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service port office of the Customs and
Border Protection’’ and adding in its
place the words ‘‘201 Varick Street,
Suite 501, New York, New York 10014’’.
Dated: October 25, 2016.
R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border
Protection.
[FR Doc. 2016–26075 Filed 10–27–16; 8:45 am]
BILLING CODE 9111–14–P
DEPARTMENT OF LABOR
Office of the Secretary
29 CFR Part 20
RIN 1290–AA27
Administrative Wage Garnishment
Procedures
Office of the Secretary, Labor.
Final rule.
AGENCY:
ACTION:
This rule will allow the U.S.
Department of Labor (Department) to
garnish the disposable wages of nonfederal workers who are indebted to the
Department without first obtaining a
court order. It implements the
administrative wage garnishment
provisions contained in the Debt
Collection Improvement Act of 1996
(DCIA) in accordance with the
regulations issued by the Secretary of
the Treasury.
DATES: This final rule is effective on
October 28, 2016.
FOR FURTHER INFORMATION CONTACT:
Shelia Alexander, Office of the Chief
Financial Officer, (202) 693–4472; or
Rachel Rikleen, Office of the Solicitor,
(202) 693–5702.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Debt Collection Improvement Act
Requirements and Background
Section 31001(o) of the Debt
Collection Improvement Act of 1996
(DCIA), which is codified at 31 U.S.C.
3720D, authorizes federal agencies to
use administrative procedure to garnish
the disposable pay of an individual to
collect delinquent non-tax debt owed to
the United States in accordance with
regulations promulgated by the
Secretary of the Treasury. Wage
garnishment is a process whereby an
employer withholds amounts from an
employee’s wages and pays those
amounts to the employee’s creditor
pursuant to a withholding order. Under
the DCIA, agencies may garnish up to
15% of a delinquent non-tax debtor’s
disposable wages. Prior to the
enactment of the DCIA, agencies were
generally required to obtain a court
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Federal Register / Vol. 81, No. 209 / Friday, October 28, 2016 / Rules and Regulations
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judgment before garnishing the wages of
non-Federal employees.
The DCIA requires the Secretary of
the Treasury to issue regulations
implementing the administrative wage
garnishment requirements. These
implementing regulations, which are at
31 CFR 285.11, provide for due process
for nontax debtors and require agencies
to publish regulations for administrative
wage garnishment hearings. Pursuant to
31 CFR 285.11(f), federal agencies must
either prescribe regulations for the
conduct of an administrative wage
garnishment hearing consistent with the
procedures set forth in section 285.11 or
adopt section 285.11 without change by
reference. Through this rule, the
Department has decided to issue its own
regulations consistent with the
procedural requirements of section
285.11.
This final rule governs only
administrative wage garnishment.
Nothing in this regulation precludes the
use of collection remedies not contained
in the regulation. The Department and
other federal agencies may
simultaneously use multiple collection
remedies to collect a debt, except as
prohibited by law.
The Department may, but is not
required to, promulgate additional
policies, procedures, and
understandings consistent with this
regulation and other applicable Federal
laws, policies, and procedures, subject
to the approval of the Department’s
Chief Financial Officer or their delegate.
The Department does not intend for its
components, agencies, and entities to be
able to adopt different policies,
procedures, or understandings.
II. Discussion of Comments
In response to its Interim Final Rule
(IFR) concerning Administrative Wage
Garnishment (80 FR 60797 October 8,
2015), the Department received five
comments from private citizens and an
industry association. The comments
focused primarily on three subject areas:
The justification for the regulation, due
process concerns, and the burden of
proof requirements.
Two commenters asked why the
regulation is necessary, arguing that the
Department must explain why the
current debt collection tool are
insufficient. The Department has
determined that it is legally obligated to
prescribe regulations for the conduct of
administrative wage garnishment. 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) of 31 CFR 285.11 provides
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that ‘‘[a]gencies shall prescribe
regulations for the conduct of
administrative wage garnishment
hearings consistent with this section or
shall adopt this section without change
by reference.’’ This regulatory obligation
is what necessitates this final rule. No
changes were made to the final rule in
response to the comments received
regarding the regulation’s justification.
The Department received four
comments raising concerns related to
due process. In general, these comments
argued that garnishing wages through an
administrative process, instead of
through the courts, would remove
protections for debtors and may cause
unnecessary hardships to impoverished
individuals. The Department has
determined the regulation protects due
process rights that must be afforded to
a debtor when an agency seeks to collect
a debt, including the ability to verify,
challenge, and compromise claims, and
provide access to administrative appeals
procedures. Under section 20.205,
debtors must be notified of the potential
of a wage garnishment. Under section
20.206, a hearing must be held prior to
the issuance of a withholding order if
the debtor submits a timely request. The
Department will provide the debtor with
an opportunity to inspect and copy
records related to the debt, and to
establish a repayment agreement under
section 20.205. All of these
requirements protect the due process
rights of the debtors, and, as a result, no
changes have been made to the final
rule in response to comments received.
As for concerns about imposing
untenable burdens on debtors, the
proposed rule included multiple
provisions to protect against this
outcome. For example, under section
20.210, the Department may not garnish
the wages of a debtor who has been
involuntarily separated from
employment until that individual has
been re-employed continuously for at
least 12 months. Additionally, section
20.209 sets out clear limits on the
amounts the Department may seek to
garnish, and section 20.211 allows the
debtor to request adjustments to the
garnishment based on new financial
hardships. The Department has
determined that these protections are
sufficient to ensure that no undue
burden is put on impoverished debtors.
One commenter indicated the rule
should be modified to require ‘‘an oral,
in-person, face-to-face meeting.’’
Currently, under section 20.20.206, a
hearing may be conducted in writing, by
telephone or other communications
technology, or in person. The
commenter was concerned that anything
other than a face to face meeting would
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fail to demonstrate the individuals’
situation and would harm the process.
Under 31 CFR 285.11(f)(3)(ii), ‘‘[a]ll
travel expenses incurred by the debtor
in connection with an in-person hearing
will be borne by the debtor.’’ The
Department has determined requiring
debtors to appear in-person would
constitute an unconscionable financial
burden on debtors and serve as an
unreasonable obstacle to appropriate
disputes. The Department notes that inperson hearings are not required to
ensure that due process is served. As a
result, no changes have been made to
the final rule in response to comments
received.
Finally, one commenter raised a
concern about the burden of proof
requirements found in section 20.206(f).
The commenter contends that the
section does not describe requirements
for what documentation the Department
must produce to ‘‘establish the existence
of the debt and the amount of the debt’’
and that more information would be
necessary for a court-ordered
garnishment. Under section 20.206(f),
the Department will have the initial
burden of proving, by a preponderance
of the evidence, the existence or amount
of the debt by submitting a certified
copy of the adjudication or other
document. By requiring this
documentation, the Department has set
a standard for the kind of document that
will be acceptable to meet its burden of
proof. This documentation requirement
is equivalent to the proof that would be
needed in some courts for a garnishment
order. Additionally, this rule parallels
existing regulations of other agencies,
including the Department of the
Treasury, those promulgated by other
Federal agencies, and the Federal
Claims Collection Standards (FCCS), as
required by the Debt Collection
Improvement Act of 1996.
III. Summary of Key Aspects of the
Rule
This rule allows the Department to
initiate proceedings administratively to
garnish the wages of a delinquent
debtor. It applies to debts owed to the
Department or in connection with any
program administered by the
Department. The administrative wage
garnishment process will be applied
consistently throughout the Department.
The Department can enter into
agreements, such as memoranda of
understanding, with other Federal
agencies permitting that agency to
administer part or all of the
Department’s administrative wage
garnishment process. Nothing in this
regulation requires the Department to
duplicate notices or administrative
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proceedings required by contract, this
regulation, or other laws or regulations.
Thus, for example, the Department is
not required to provide a debtor with
two hearings on the same issue merely
because two different collection tools
are used, each of which requires that the
debtor be provided with a hearing.
Section 20.205 lists the notice
requirements, which includes an
explanation of the debtor’s rights. The
debtor is allowed to inspect Department
records related to the debt, enter into a
written repayment agreement, and have
a hearing.
Under section 20.206, a debtor can
request one of two types of available
hearings—a paper hearing or an oral
hearing. The format of oral hearings is
not limited to in-person and telephone
hearings, it may include new forms of
technology. The hearing official has the
authority to determine the kind of
hearing and the amount of time allotted
each hearing.
If a hearing is held, the Department
can meet its initial burden by offering
documentation, including a copy of the
debt adjudication, which demonstrates
the existence of the debt and its amount
as is required under section 20.206(f).
Once the Department has established its
prima facie case, the debtor can dispute
the existence or amount of the debt. For
example, debtors can meet their burden
by demonstrating that they are not the
person who owes a debt to the
Department, that they have not received
payments from the Department or have
not been fined by the Department, or
that they have already paid the debt.
Additionally, the Federal Employees
Compensation Act (FECA), 5 U.S.C.
8101–8193, contains a provision that
precludes administrative and judicial
review of agency determinations, which
normally includes a repayment
schedule. As a result, for hearings
related to FECA debts, once the
Department has made its prima facie
case, the debtor has only two limited
grounds on which he or she can
demonstrate that an administrative wage
garnishment is not appropriate. The
debtor may not challenge the underlying
merits of the determination that created
the debt.
Section 20.207 outlines the timing
and elements of the withholding order
to the debtor’s employer. Pursuant to
section 20.208, employers must
complete and return a certification
noting, in addition to other information,
that they have received the withholding
order and verifying the debtor’s
employment.
Section 20.209 describes how much
the Department can withhold through
administrative wage garnishment,
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which is up to 15% of the debtor’s
disposable pay, and the employer’s
administrative wage garnishment duties.
A withholding order for family support
would always have priority over an
administrative wage garnishment order.
If there are multiple federal garnishment
orders, priority depends on which
garnishment order was first obtained.
When a debtor’s disposable pay is
already subject to one or more
withholding orders with higher or equal
priority with the Department’s
administrative wage garnishment order,
the amount that the employer must
withhold and remit to the Department
would not be more than an amount
calculated by subtracting the amount(s)
withheld under the other withholding
order(s) from 25% of the debtor’s
disposable pay. For example, if the
employer is withholding 20% of a
debtor’s disposable pay for a family
support or prior withholding order, the
amount withheld for the subsequent
withholding order issued under this
section is limited to 5% of the debtor’s
disposable pay. When the family
support or prior withholding order
terminates, the amount withheld for the
subsequent withholding order issued
under this section may be increased to
15%.
Finally, sections 20.210 and 20.211
provide protections to employees that
are facing financial hardships. Section
20.210 prohibits the Department from
garnishing the wages of a debtor who
was involuntarily separated from
employment. The debtor has the
obligation under this section to inform
the Department of the involuntary
separation. Section 20.211 outlines how
a debtor can request a review of their
garnishment due to materially changed
circumstances that have created a
financial hardship.
IV. Compliance With Statutory and
Regulatory Requirements for
Rulemakings
The Administrative Procedure Act.
The Department has determined this
rule involves an agency procedure or
practice, and therefore no notice of
proposed rulemaking is required under
the Administrative Procedure Act (APA)
at 5 U.S.C. 553(b)(A) and (B).
This 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
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Department has determined that prior
notice and public comment procedures
would be unnecessary pursuant to 5
U.S.C. 553(b)(B).
The Paperwork Reduction Act. The
Department has determined that the
provisions of the Paperwork Reduction
Act of 1995, as amended, 44 U.S.C.
3501, et seq., do not apply to any
collections of information contained in
this rule because any such collections of
information are made during the
conduct of administrative action taken
by an agency against specific
individuals or entities. 5 CFR
1320.4(a)(2). In the IFR, the Department
specifically invited comments about this
determination, but none were received.
The Regulatory Flexibility Act. The
Regulatory Flexibility Act (RFA), Public
Law 96–354, as amended (5 U.S.C. 601
et seq.), requires administrative agencies
to consider the effect of their actions on
small entities, including small
businesses. As a procedural rule, the
requirements of the RFA pertaining to
regulatory flexibility analysis do not
apply. However, even if the RFA were
to apply, the Department certifies that
this rule will not have a significant
impact on a substantial number of small
entities as defined in RFA. Although
small entities will be subject to this
regulation and to the certification
requirement in this rule, the
requirements will not have a significant
economic impact on these entities.
Employers of delinquent debtors must
certify certain information about the
debtor such as the debtor’s employment
status and earnings. This information is
contained in the employer’s payroll
records. Therefore, it will not take a
significant amount of time or result in
a significant cost for an employer to
complete the certification form. Even if
an employer is served withholding
orders on several employees over the
course of a year, the cost imposed on the
employer to complete the certifications
would not have a significant economic
impact on that entity. Employers are not
required to vary their normal pay cycles
in order to comply with a withholding
order issued pursuant to this rule.
Unfunded Mandates Reform Act. Title
II of the Unfunded Mandates Reform
Act of 1995 (UMRA), Public Law 104–
4, requires Federal agencies to assess the
effects of their regulatory actions on
state, local, and tribal governments or
the private sector. This rule contains no
Federal mandates, as defined by Title II
of the UMRA, for State, local, and tribal
governments or the private sector.
Therefore, this rule is not subject to the
requirements of sections 202 and 205 of
UMRA.
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Federal Register / Vol. 81, No. 209 / Friday, October 28, 2016 / Rules and Regulations
Executive Orders 12866, 12988, and
13132. This rule is not a significant
regulatory action as defined in
Executive Order 12866. The rule has
been reviewed in accordance with
Executive Order 12988. This rule
preempts state laws that are inconsistent
with its provisions. Before a judicial
action may be brought concerning this
rule or action taken under this rule, all
administrative remedies must be
exhausted. This regulation will not have
a substantial direct effect on the states,
on the relationship between the national
government and the states, or on
distribution of power and
responsibilities among the various
levels of Government. Therefore, in
accordance with E.O. 13132, it is
determined this regulation does not
have sufficient Federalism implications
to warrant the preparation of a
Federalism Assessment.
List of Subjects in 29 CFR Part 20
Administrative wage garnishment,
Debt collection, Labor.
Signed at Washington, DC, on this 17th day
of October, 2016.
Thomas E. Perez,
U.S. Secretary of Labor.
PART 20—FEDERAL CLAIMS
COLLECTION
Accordingly, the interim rule
amending 29 CFR part 20 which was
published at 80 FR 60797 on October 8,
2015, is adopted as a final rule without
change.
■
[FR Doc. 2016–26093 Filed 10–27–16; 8:45 am]
SUPPLEMENTARY INFORMATION:
Throughout this document wherever
‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean
the EPA.
40 CFR Part 52
[EPA–R06–OAR–2012–0263; FRL–9953–46–
Region 6]
Approval and Promulgation of
Implementation Plans; Oklahoma;
Disapproval of Prevention of
Significant Deterioration for Particulate
Matter Less Than 2.5 Micrometers—
Significant Impact Levels and
Significant Monitoring Concentration
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
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The EPA has established a
docket for this action under Docket ID
No. EPA–R06–OAR–2012–0263. All
documents in the docket are listed on
the https://www.regulations.gov Web
site. Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
or other information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the Internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available either
electronically through https://
www.regulations.gov or in hard copy at
the EPA Region 6, 1445 Ross Avenue,
Suite 700, Dallas, Texas 75202–2733.
ADDRESSES:
Adina Wiley, (214) 665–2115,
wiley.adina@epa.gov.
ENVIRONMENTAL PROTECTION
AGENCY
The Environmental Protection
Agency (EPA) is disapproving the
severable portions of the February 6,
2012, Oklahoma State Implementation
Plan (SIP) submittal which establish
certain de minimis thresholds for
SUMMARY:
15:21 Oct 27, 2016
This rule is effective on
November 28, 2016.
DATES:
FOR FURTHER INFORMATION CONTACT:
BILLING CODE 4510–7C–P
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particulate matter less than 2.5
micrometers in diameter (PM2.5) in the
Prevention of Significant Deterioration
(PSD) permitting requirements.
Specifically, we are disapproving
provisions that adopt and implement
the PM2.5 significant impact levels (SILs)
and significant monitoring
concentration (SMC); both of which
were vacated by a federal court and
subsequently removed from federal PSD
regulations. We are disapproving the
submitted provisions as inconsistent
with federal laws and regulations for the
permitting of PM2.5. The EPA is
finalizing this disapproval under section
110 and part C of the Clean Air Act
(CAA).
Jkt 241001
I. Background
The background for this action is
discussed in detail in our August 11,
2016, proposed disapproval at 81 FR
53098. In that document, we proposed
to disapprove the severable portions of
the February 6, 2012, Oklahoma SIP
submittal which establish the voluntary
PM2.5 SILs provision and SMC. We
presented our preliminary
determination that these submitted
revisions to the Oklahoma SIP must be
disapproved because they establish
permitting SIP requirements that are
inconsistent with the federal statutory
and regulatory permitting requirements
for PM2.5. We did not receive any
comments regarding our proposed
disapproval
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74921
II. Final Action
We are disapproving the following
severable portions of the February 6,
2012, Oklahoma SIP submittal
establishing the voluntary PM2.5 SILs
provision and SMC. We are taking this
final action under section 110 and part
C of the CAA.
• Substantive revisions to the
Oklahoma SIP at OAC 252:100–8–
33(c)(1)(C) establishing the PM2.5 SMC
as submitted on February 6, 2012; and
• Substantive revisions to the
Oklahoma PSD program in OAC
252:100–8–35(a)(2) establishing the
PM2.5 PSD SILs provision as submitted
on February 6, 2012.
The EPA is disapproving the revisions
listed because the submitted provisions
are inconsistent with the federal
statutory and regulatory permitting
requirements for PM2.5. Upon the
effective date of this final disapproval,
owners or operators of a proposed
source or modification will continue to
satisfy the source impact analysis
provisions for PM2.5 as required under
the Oklahoma SIP at OAC 252:100–8–
35(a)(1). Additionally, the State of
Oklahoma will continue to have the
necessary authority to require
monitoring of PM2.5 under the
Oklahoma SIP at OAC 252:100–8–
35.1(b)(3), consistent with the
provisions of 40 CFR 52.21(m). This
final disapproval does not require the
EPA to promulgate a Federal
Implementation Plan, because the
Oklahoma PSD SIP program continues
to satisfy the Federal PSD SIP
requirements for PM2.5 monitoring and
source impact analysis. We are
finalizing this disapproval under section
110 and part C of the Act; as such, the
EPA will not impose sanctions as a
result of this final disapproval.
III. Statutory and Executive Order
Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
This action is not a significant
regulatory action and was therefore not
submitted to the Office of Management
and Budget (OMB) for review.
B. Paperwork Reduction Act (PRA)
This action does not impose an
information collection burden under the
PRA. There is no burden imposed under
the PRA because this action disapproves
submitted revisions that are no longer
consistent with federal laws and
regulations for the regulation and
permitting of PM2.5.
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]]>Agencies
[Federal Register Volume 81, Number 209 (Friday, October 28, 2016)]
[Rules and Regulations]
[Pages 74918-74921]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26093]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Office of the Secretary
29 CFR Part 20
RIN 1290-AA27
Administrative Wage Garnishment Procedures
AGENCY: Office of the Secretary, Labor.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule will allow the U.S. Department of Labor (Department)
to garnish the disposable wages of non-federal workers who are indebted
to the Department without first obtaining a court order. It implements
the administrative wage garnishment provisions contained in the Debt
Collection Improvement Act of 1996 (DCIA) in accordance with the
regulations issued by the Secretary of the Treasury.
DATES: This final rule is effective on October 28, 2016.
FOR FURTHER INFORMATION CONTACT: Shelia Alexander, Office of the Chief
Financial Officer, (202) 693-4472; or Rachel Rikleen, Office of the
Solicitor, (202) 693-5702.
SUPPLEMENTARY INFORMATION:
I. Debt Collection Improvement Act Requirements and Background
Section 31001(o) of the Debt Collection Improvement Act of 1996
(DCIA), which is codified at 31 U.S.C. 3720D, authorizes federal
agencies to use administrative procedure to garnish the disposable pay
of an individual to collect delinquent non-tax debt owed to the United
States in accordance with regulations promulgated by the Secretary of
the Treasury. Wage garnishment is a process whereby an employer
withholds amounts from an employee's wages and pays those amounts to
the employee's creditor pursuant to a withholding order. Under the
DCIA, agencies may garnish up to 15% of a delinquent non-tax debtor's
disposable wages. Prior to the enactment of the DCIA, agencies were
generally required to obtain a court
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judgment before garnishing the wages of non-Federal employees.
The DCIA requires the Secretary of the Treasury to issue
regulations implementing the administrative wage garnishment
requirements. These implementing regulations, which are at 31 CFR
285.11, provide for due process for nontax debtors and require agencies
to publish regulations for administrative wage garnishment hearings.
Pursuant to 31 CFR 285.11(f), federal agencies must either prescribe
regulations for the conduct of an administrative wage garnishment
hearing consistent with the procedures set forth in section 285.11 or
adopt section 285.11 without change by reference. Through this rule,
the Department has decided to issue its own regulations consistent with
the procedural requirements of section 285.11.
This final rule governs only administrative wage garnishment.
Nothing in this regulation precludes the use of collection remedies not
contained in the regulation. The Department and other federal agencies
may simultaneously use multiple collection remedies to collect a debt,
except as prohibited by law.
The Department may, but is not required to, promulgate additional
policies, procedures, and understandings consistent with this
regulation and other applicable Federal laws, policies, and procedures,
subject to the approval of the Department's Chief Financial Officer or
their delegate. The Department does not intend for its components,
agencies, and entities to be able to adopt different policies,
procedures, or understandings.
II. Discussion of Comments
In response to its Interim Final Rule (IFR) concerning
Administrative Wage Garnishment (80 FR 60797 October 8, 2015), the
Department received five comments from private citizens and an industry
association. The comments focused primarily on three subject areas: The
justification for the regulation, due process concerns, and the burden
of proof requirements.
Two commenters asked why the regulation is necessary, arguing that
the Department must explain why the current debt collection tool are
insufficient. The Department has determined that it is legally
obligated to prescribe regulations for the conduct of administrative
wage garnishment. 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) of 31 CFR 285.11 provides that ``[a]gencies shall
prescribe regulations for the conduct of administrative wage
garnishment hearings consistent with this section or shall adopt this
section without change by reference.'' This regulatory obligation is
what necessitates this final rule. No changes were made to the final
rule in response to the comments received regarding the regulation's
justification.
The Department received four comments raising concerns related to
due process. In general, these comments argued that garnishing wages
through an administrative process, instead of through the courts, would
remove protections for debtors and may cause unnecessary hardships to
impoverished individuals. The Department has determined the regulation
protects due process rights that must be afforded to a debtor when an
agency seeks to collect a debt, including the ability to verify,
challenge, and compromise claims, and provide access to administrative
appeals procedures. Under section 20.205, debtors must be notified of
the potential of a wage garnishment. Under section 20.206, a hearing
must be held prior to the issuance of a withholding order if the debtor
submits a timely request. The Department will provide the debtor with
an opportunity to inspect and copy records related to the debt, and to
establish a repayment agreement under section 20.205. All of these
requirements protect the due process rights of the debtors, and, as a
result, no changes have been made to the final rule in response to
comments received.
As for concerns about imposing untenable burdens on debtors, the
proposed rule included multiple provisions to protect against this
outcome. For example, under section 20.210, the Department may not
garnish the wages of a debtor who has been involuntarily separated from
employment until that individual has been re-employed continuously for
at least 12 months. Additionally, section 20.209 sets out clear limits
on the amounts the Department may seek to garnish, and section 20.211
allows the debtor to request adjustments to the garnishment based on
new financial hardships. The Department has determined that these
protections are sufficient to ensure that no undue burden is put on
impoverished debtors.
One commenter indicated the rule should be modified to require ``an
oral, in-person, face-to-face meeting.'' Currently, under section
20.20.206, a hearing may be conducted in writing, by telephone or other
communications technology, or in person. The commenter was concerned
that anything other than a face to face meeting would fail to
demonstrate the individuals' situation and would harm the process.
Under 31 CFR 285.11(f)(3)(ii), ``[a]ll travel expenses incurred by the
debtor in connection with an in-person hearing will be borne by the
debtor.'' The Department has determined requiring debtors to appear in-
person would constitute an unconscionable financial burden on debtors
and serve as an unreasonable obstacle to appropriate disputes. The
Department notes that in-person hearings are not required to ensure
that due process is served. As a result, no changes have been made to
the final rule in response to comments received.
Finally, one commenter raised a concern about the burden of proof
requirements found in section 20.206(f). The commenter contends that
the section does not describe requirements for what documentation the
Department must produce to ``establish the existence of the debt and
the amount of the debt'' and that more information would be necessary
for a court-ordered garnishment. Under section 20.206(f), the
Department will have the initial burden of proving, by a preponderance
of the evidence, the existence or amount of the debt by submitting a
certified copy of the adjudication or other document. By requiring this
documentation, the Department has set a standard for the kind of
document that will be acceptable to meet its burden of proof. This
documentation requirement is equivalent to the proof that would be
needed in some courts for a garnishment order. Additionally, this rule
parallels existing regulations of other agencies, including the
Department of the Treasury, those promulgated by other Federal
agencies, and the Federal Claims Collection Standards (FCCS), as
required by the Debt Collection Improvement Act of 1996.
III. Summary of Key Aspects of the Rule
This rule allows the Department to initiate proceedings
administratively to garnish the wages of a delinquent debtor. It
applies to debts owed to the Department or in connection with any
program administered by the Department. The administrative wage
garnishment process will be applied consistently throughout the
Department.
The Department can enter into agreements, such as memoranda of
understanding, with other Federal agencies permitting that agency to
administer part or all of the Department's administrative wage
garnishment process. Nothing in this regulation requires the Department
to duplicate notices or administrative
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proceedings required by contract, this regulation, or other laws or
regulations. Thus, for example, the Department is not required to
provide a debtor with two hearings on the same issue merely because two
different collection tools are used, each of which requires that the
debtor be provided with a hearing.
Section 20.205 lists the notice requirements, which includes an
explanation of the debtor's rights. The debtor is allowed to inspect
Department records related to the debt, enter into a written repayment
agreement, and have a hearing.
Under section 20.206, a debtor can request one of two types of
available hearings--a paper hearing or an oral hearing. The format of
oral hearings is not limited to in-person and telephone hearings, it
may include new forms of technology. The hearing official has the
authority to determine the kind of hearing and the amount of time
allotted each hearing.
If a hearing is held, the Department can meet its initial burden by
offering documentation, including a copy of the debt adjudication,
which demonstrates the existence of the debt and its amount as is
required under section 20.206(f). Once the Department has established
its prima facie case, the debtor can dispute the existence or amount of
the debt. For example, debtors can meet their burden by demonstrating
that they are not the person who owes a debt to the Department, that
they have not received payments from the Department or have not been
fined by the Department, or that they have already paid the debt.
Additionally, the Federal Employees Compensation Act (FECA), 5
U.S.C. 8101-8193, contains a provision that precludes administrative
and judicial review of agency determinations, which normally includes a
repayment schedule. As a result, for hearings related to FECA debts,
once the Department has made its prima facie case, the debtor has only
two limited grounds on which he or she can demonstrate that an
administrative wage garnishment is not appropriate. The debtor may not
challenge the underlying merits of the determination that created the
debt.
Section 20.207 outlines the timing and elements of the withholding
order to the debtor's employer. Pursuant to section 20.208, employers
must complete and return a certification noting, in addition to other
information, that they have received the withholding order and
verifying the debtor's employment.
Section 20.209 describes how much the Department can withhold
through administrative wage garnishment, which is up to 15% of the
debtor's disposable pay, and the employer's administrative wage
garnishment duties. A withholding order for family support would always
have priority over an administrative wage garnishment order. If there
are multiple federal garnishment orders, priority depends on which
garnishment order was first obtained. When a debtor's disposable pay is
already subject to one or more withholding orders with higher or equal
priority with the Department's administrative wage garnishment order,
the amount that the employer must withhold and remit to the Department
would not be more than an amount calculated by subtracting the
amount(s) withheld under the other withholding order(s) from 25% of the
debtor's disposable pay. For example, if the employer is withholding
20% of a debtor's disposable pay for a family support or prior
withholding order, the amount withheld for the subsequent withholding
order issued under this section is limited to 5% of the debtor's
disposable pay. When the family support or prior withholding order
terminates, the amount withheld for the subsequent withholding order
issued under this section may be increased to 15%.
Finally, sections 20.210 and 20.211 provide protections to
employees that are facing financial hardships. Section 20.210 prohibits
the Department from garnishing the wages of a debtor who was
involuntarily separated from employment. The debtor has the obligation
under this section to inform the Department of the involuntary
separation. Section 20.211 outlines how a debtor can request a review
of their garnishment due to materially changed circumstances that have
created a financial hardship.
IV. Compliance With Statutory and Regulatory Requirements for
Rulemakings
The Administrative Procedure Act. The Department has determined
this rule involves an agency procedure or practice, and therefore no
notice of proposed rulemaking is required under the Administrative
Procedure Act (APA) at 5 U.S.C. 553(b)(A) and (B).
This 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 Department has
determined that prior notice and public comment procedures would be
unnecessary pursuant to 5 U.S.C. 553(b)(B).
The Paperwork Reduction Act. The Department has determined that the
provisions of the Paperwork Reduction Act of 1995, as amended, 44
U.S.C. 3501, et seq., do not apply to any collections of information
contained in this rule because any such collections of information are
made during the conduct of administrative action taken by an agency
against specific individuals or entities. 5 CFR 1320.4(a)(2). In the
IFR, the Department specifically invited comments about this
determination, but none were received.
The Regulatory Flexibility Act. The Regulatory Flexibility Act
(RFA), Public Law 96-354, as amended (5 U.S.C. 601 et seq.), requires
administrative agencies to consider the effect of their actions on
small entities, including small businesses. As a procedural rule, the
requirements of the RFA pertaining to regulatory flexibility analysis
do not apply. However, even if the RFA were to apply, the Department
certifies that this rule will not have a significant impact on a
substantial number of small entities as defined in RFA. Although small
entities will be subject to this regulation and to the certification
requirement in this rule, the requirements will not have a significant
economic impact on these entities. Employers of delinquent debtors must
certify certain information about the debtor such as the debtor's
employment status and earnings. This information is contained in the
employer's payroll records. Therefore, it will not take a significant
amount of time or result in a significant cost for an employer to
complete the certification form. Even if an employer is served
withholding orders on several employees over the course of a year, the
cost imposed on the employer to complete the certifications would not
have a significant economic impact on that entity. Employers are not
required to vary their normal pay cycles in order to comply with a
withholding order issued pursuant to this rule.
Unfunded Mandates Reform Act. Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA), Public Law 104-4, requires Federal agencies
to assess the effects of their regulatory actions on state, local, and
tribal governments or the private sector. This rule contains no Federal
mandates, as defined by Title II of the UMRA, for State, local, and
tribal governments or the private sector. Therefore, this rule is not
subject to the requirements of sections 202 and 205 of UMRA.
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Executive Orders 12866, 12988, and 13132. This rule is not a
significant regulatory action as defined in Executive Order 12866. The
rule has been reviewed in accordance with Executive Order 12988. This
rule preempts state laws that are inconsistent with its provisions.
Before a judicial action may be brought concerning this rule or action
taken under this rule, all administrative remedies must be exhausted.
This regulation will not have a substantial direct effect on the
states, on the relationship between the national government and the
states, or on distribution of power and responsibilities among the
various levels of Government. Therefore, in accordance with E.O. 13132,
it is determined this regulation does not have sufficient Federalism
implications to warrant the preparation of a Federalism Assessment.
List of Subjects in 29 CFR Part 20
Administrative wage garnishment, Debt collection, Labor.
Signed at Washington, DC, on this 17th day of October, 2016.
Thomas E. Perez,
U.S. Secretary of Labor.
PART 20--FEDERAL CLAIMS COLLECTION
0
Accordingly, the interim rule amending 29 CFR part 20 which was
published at 80 FR 60797 on October 8, 2015, is adopted as a final rule
without change.
[FR Doc. 2016-26093 Filed 10-27-16; 8:45 am]
BILLING CODE 4510-7C-P
