Workers in Oregon who earn modest wages gained a stronger shield against creditors on July 1, 2026, when a new tier of garnishment protections took effect. Under the schedule set by SB 1595, the minimum amount of weekly pay that cannot be garnished rose to $400 for each pay period of one week or less, while the longstanding rule protecting 75 percent of disposable earnings remains in place. Whichever figure is larger is the amount an employer must keep out of a creditor’s reach, a change that directly raises the floor for lower-income Oregonians facing debt collection.
How the $400 weekly floor changes garnishment math
Oregon’s wage garnishment framework lives in Chapter 18 of state law, which governs enforcement of judgments and spells out how much of a paycheck creditors can claim. The statute has long protected 75 percent of a debtor’s disposable earnings, defined as gross wages minus required payroll tax withholdings. What changed is the dollar floor beneath that percentage.
Before the current schedule kicked in, lower-paid workers could find that 75 percent of their take-home pay still left them with very little protected income. The engrossed bill addresses that gap by writing a rising series of minimum exempt amounts directly into ORS 18.385(2). For wages payable on or after July 1, 2026, and before July 1, 2027, the minimum exempt amount is $400 for a one-week-or-less pay period. The practical effect: if 75 percent of a worker’s disposable earnings comes out to less than $400 a week, the $400 figure controls, and the creditor gets less.
The Oregon Department of Revenue, which collects certain non-tax debts on behalf of other state agencies, has told employers they must use revised calculations under SB 1595 when processing garnishment orders for that category of debt. The department’s guidance for garnishees states directly that “the normal wage exemption protects 75 percent of a debtor’s wages after required payroll taxes are deducted,” consistent with ORS 18.385(1). That percentage has not changed, but the dollar minimum beneath it has, and employers are expected to adjust their payroll systems accordingly.
SB 1595 and the annual adjustment mechanism
SB 1595 was codified as Oregon Laws 2024, chapter 100, after passing the 2024 Regular Session, and the measure’s overview on the legislature’s site confirms that it revises multiple exemption thresholds and related procedures. The official overview explains that the bill did more than set a single new number: it established a schedule of escalating minimums and laid groundwork for future adjustments tied to inflation and wage levels. The Oregon Judicial Department has noted that state law requires Consumer Price Index-based updates to certain garnishment exemption amounts, with the current effective window for the $400 weekly floor running from July 1, 2026, through June 30, 2027.
Employers play a central role in this system. When they receive a garnishment order, they must calculate the exempt portion of each paycheck using the form referenced in ORS 18.840 and apply whichever protection, the 75 percent rule or the $400 weekly floor, yields the larger exempt amount. Getting the calculation wrong can expose an employer to liability for amounts that should have been withheld but were not, or for sums improperly taken from a worker’s protected wages. Payroll departments are therefore expected to update their internal worksheets and software to reflect the new floor and the annual adjustment schedule.
For workers, the changes are most tangible at the lower end of the wage scale. A part-time employee with disposable earnings of $420 per week, for example, would have seen only $315 protected under the pure 75 percent rule. With the $400 floor in place, that same worker must now have at least $400 exempt from garnishment, leaving only $20 potentially available to creditors. As earnings rise, the percentage rule quickly overtakes the flat dollar amount, so middle- and higher-income employees will see little change in practice, but the new structure is designed to prevent the lowest-paid workers from having nearly all of their paychecks siphoned off by judgment creditors.
SB 1595’s supporters framed the reform as a way to balance the interests of creditors with the basic subsistence needs of debtors, arguing that wage garnishment should not drive workers into deeper financial instability. By tying future exemption amounts to inflation and, over time, to minimum-wage benchmarks, lawmakers aimed to avoid the erosion that occurs when fixed dollar thresholds remain static for years. The $400 weekly floor taking effect in July 2026 is one step in that broader recalibration, signaling an ongoing shift in Oregon’s approach to collection law that prioritizes a more realistic baseline of protected income.
