Oregon workers facing wage garnishment will keep more of their paychecks when a new protection takes effect on July 1, 2026. Under the state’s updated schedule, the amount shielded from creditors rises to the greater of 75 percent of disposable earnings or $400 per week, whichever is larger. The change, enacted through SB 1595 during the 2024 regular legislative session, sets a hard dollar floor that did not previously exist at this level, directly reducing how much creditors can collect from lower-wage earners.
How the $400 weekly floor changes the garnishment math
Oregon’s general garnishment rule, codified in state statute, has long protected 75 percent of a worker’s disposable earnings from execution. Disposable earnings are defined as wages remaining after required payroll taxes are deducted. For someone earning $600 a week after taxes, the old formula already shielded $450, leaving $150 available to creditors. The 75 percent rule still applies under the new schedule, but the $400 weekly minimum now acts as a backstop for workers whose 75 percent calculation falls below that threshold.
Consider a worker whose disposable weekly pay is $500. Seventy-five percent of that amount is $375. Under the prior rule, creditors could garnish $125. Starting July 1, 2026, the $400 floor means only $100 can be taken instead. The practical effect is sharpest for workers earning roughly $533 or less per week in disposable pay, because below that line the dollar floor exceeds the percentage protection. For higher earners, the 75 percent rule remains the binding constraint, and their garnishment exposure will not change unless future adjustments raise the floor further.
The new limit is also likely to simplify budgeting for workers who are already subject to garnishment. A predictable minimum of $400 per week creates a clearer baseline for rent, utilities, and other fixed expenses, especially for employees whose hours fluctuate from week to week. While creditors may see slower repayment on existing judgments, the policy reflects a legislative judgment that extreme reductions in take-home pay increase the risk of default on other obligations and can push workers toward deeper financial instability.
The hypothesis that this floor will produce a measurable drop in average collections per garnishment order within the first year is plausible on its face. Workers clustered near Oregon’s median hourly wage, particularly those in part-time or service-sector roles, are most likely to fall into the range where the $400 floor binds. No public dataset currently tracks per-order collection amounts at the state level, so confirming the effect will require data that Oregon agencies have not yet released. Until such figures become available, the impact can only be estimated using wage distributions and the statutory formulas.
SB 1595 and the statutory timeline behind the new limit
The legislature set the $400 weekly figure through Senate Bill 1595, which established a stepped schedule of rising exemption floors. Lawmakers did not simply insert a single permanent dollar amount into the garnishment statute; instead, they created a series of effective dates and corresponding thresholds, allowing the level of protection to evolve over time. This approach aligns wage protections with broader economic conditions and anticipated cost-of-living changes.
The B-Engrossed version of SB 1595 specifies that the $400 amount applies to wages payable on or after July 1, 2026, and before July 1, 2027. During that one-year window, employers must compare 75 percent of disposable earnings to the $400 figure and protect whichever is higher. After July 1, 2027, the floor is subject to further adjustment under the same statutory framework, though the precise future amounts depend on the schedule and any later legislative changes.
The Oregon Department of Revenue instructs employers acting as garnishees that the normal wage exemption protects 75 percent of wages after required payroll taxes are deducted. Employers processing garnishment orders after July 1, 2026 will need to run both calculations, applying whichever yields the larger protected amount. This dual test means payroll departments must pay close attention to pay periods that straddle the July 1 effective date, ensuring that the correct threshold is applied based on when the wages are actually payable rather than when they were earned.
Per guidance from the Oregon Judicial Department, annual adjustments to various garnishment-related limits typically take effect on a July 1 cycle, and the 2026–2027 window created by SB 1595 aligns with that pattern. Separately, the Department of Revenue has noted that exemption amounts are now subject to periodic inflation-linked adjustments, which are intended to prevent the real value of wage protections from eroding over time. In practice, this means that the $400 floor should be understood as one step in a moving schedule rather than a permanent ceiling on protected earnings.
For workers and creditors alike, the key takeaway is that Oregon’s garnishment regime is becoming more protective at the low end of the wage scale while retaining the longstanding 75 percent rule for everyone else. Employees who expect to face garnishment in 2026 or later may want to review their pay stubs and confirm their disposable earnings so they can anticipate how much of each paycheck will remain off-limits. Creditors and collection attorneys, meanwhile, will need to adjust expectations about recovery timelines, especially in cases involving part-time or modestly paid workers whose disposable income falls below the point where the new $400 floor begins to bind.
