Final answer:
The maximum amount that can be withheld from an employee's wages for child or spousal support is set by the Consumer Credit Protection Act (CCPA). It caps withholding at 50-65% of the employee's disposable income based on certain conditions.
Step-by-step explanation:
The entity that sets the maximum amount that can be withheld from an employee's wages for child or spousal support is C. Consumer Credit Protection Act (CCPA). The CCPA puts in place federal restrictions on the percentage of an employee's disposable income that can be garnished. For child support and alimony, that maximum percentage is 50% of an individual's disposable earnings if they are supporting another spouse or child, and 60% if they are not supporting another spouse or child. An additional 5% may be withheld if the support payments are more than 12 weeks in arrears.
Individual states are also allowed to set their own limits, as long as they do not exceed the federal limits set by the CCPA. Thus, if a state's laws dictate a lower maximum amount, the lower state limit must be observed.