Can tips be garnished?
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10 Oct Can tips be garnished?

By Timothy Wiseman

When a Court issues a judgment for money, there are a number of ways that the judgment creditor can try to enforce the judgment if the judgment is not paid voluntarily. One common method of enforcing a judgment against an individual is to have the pay of the judgment debtor garnished.

In Nevada, tips are explicitly included in earnings which may be garnished. NRS 31.295(1)(b)see also NRS 21.090(1)(g)(2) (including tips as part of earnings, only 75% of which is generally exempt from execution). Federal law is more nuanced, but will also generally allow the garnishment of tips for a federal judgment so long as the employer is claiming a tip credit, which is the usual case. See 15 USC 1672(a) (defining earnings broadly)

Some employers may be confused about whether tips should be garnished because certain other states, such as Tenessee do not generally permit tips to be garnished.  Erlanger Med. Ctr. v. Strong, 382 S.W.3d 349, 353 (Tenn. Ct. App. 2012). Also, there was a time period in Nevada when it was not clear whether tips could be garnished, but the law was changed to explicitly include them in an amendment in 2005.

As a practical matter, there may be difficulties in tracking and garnishing tips which are paid directly to the employee in cash. But if the tips are paid through credit card or if they pass through the employer’s hands as part of a tipping pool, then they are clearly included in earnings in this state and may be garnished.

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