Oregon Workers to Receive Greater Wage Garnishment Protections Beginning July 1

Thousands of Oregon workers could see more money remain in their paychecks beginning July 1 as the state implements the next phase of its debt collection reforms. The change increases the amount of earnings protected from wage garnishment and marks a significant milestone in legislation approved by lawmakers in 2024.

The update stems from Senate Bill 1595, a broad debt collection reform measure enacted by the Oregon Legislature. While the law itself is not new, several provisions were designed to take effect gradually over multiple years. The latest adjustment expands protections for workers whose wages are subject to most civil debt collection orders.

Higher Wage Protections for Workers

Beginning with wages payable on or after July 1, Oregon employees must be allowed to retain the greater of 75% of their disposable earnings or $400 per week before most creditors can collect through wage garnishment.

Disposable earnings refer to the portion of income remaining after mandatory deductions such as federal and state income taxes, Social Security contributions, Medicare taxes, and other legally required withholdings.

Under the updated rules, the minimum amount of weekly earnings protected from garnishment will increase from $338 to $400. Equivalent adjustments will also apply to employees paid on biweekly, semimonthly, and monthly schedules, ensuring consistent protections regardless of payroll frequency.

As a result, many workers with active garnishment orders may see smaller amounts withheld from their paychecks once the revised limits take effect.

Part of a Broader Debt Collection Reform Effort

Senate Bill 1595 was introduced as part of Oregon’s broader effort to modernize debt collection laws and strengthen consumer protections.

Rather than implementing all provisions immediately, lawmakers structured the legislation to roll out changes in stages. Earlier reforms became effective in 2025, while the July 2026 adjustment represents another key phase in the law’s implementation.

Debts Covered by the New Rules

The updated protections generally apply to consumer debts that have resulted in civil judgments.

These may include unpaid credit card balances, medical debt, personal loans, and other qualifying financial obligations pursued through the courts.

However, not all garnishments are affected by the July 1 changes. Separate federal and state laws continue to govern collections involving child support, spousal support, certain tax obligations, and criminal restitution. As a result, individuals subject to those types of garnishments may not experience changes in the amount deducted from their earnings.

Impact on Oregon Households

The changes arrive as many Oregon households continue to navigate higher housing costs, rising insurance premiums, increasing utility bills, transportation expenses, and elevated grocery prices.

Although the legislation does not eliminate existing debts or cancel court-ordered garnishments, it changes how much income remains protected before creditors can collect.

For workers in lower-paying occupations or those employed part-time, the increase in protected earnings may provide additional flexibility in managing essential household expenses. The revised limits could be particularly meaningful in communities where wage growth has lagged behind increases in the cost of living.

Workers balancing debt repayment obligations alongside routine expenses may retain a larger share of their earnings under the updated formula.

Employers and Payroll Teams Face New Requirements

The changes will also require action from employers and payroll administrators across Oregon.

Businesses that receive wage garnishment orders must apply the revised exemption amounts to wages payable on or after July 1. Employers are responsible for ensuring workers retain the newly protected portion of their earnings before garnished funds are remitted to creditors.

The updated calculations will become part of routine payroll processing for qualifying garnishment orders statewide.

Additional Changes Planned for 2027

The July 2026 adjustment is not the final phase of Senate Bill 1595.

Additional reforms are already scheduled for July 2027. Under the next phase, Oregon plans to move away from fixed-dollar exemption amounts and instead tie protected earnings to the state’s minimum wage.

Under that approach, exemption levels would automatically adjust as minimum wage rates increase over time, reducing the need for future legislative updates.

Looking Ahead

Although the July 1 implementation does not introduce a new law, it represents one of the most visible stages of Oregon’s ongoing debt collection reforms.

For employees whose wages are currently subject to garnishment, the change will allow a larger portion of their income to remain exempt from collection. At the same time, creditors will continue to have access to garnishment remedies within the revised limits established by state law.

As Oregon moves forward with its phased debt collection reforms, the updated exemptions are expected to have a direct impact on workers, employers, and creditors alike. The changes reflect the state’s continuing effort to balance debt recovery processes with greater protection for workers’ paychecks.