How to Fulfill a Wage Garnishment
Business owners and managers rather routinely receive garnishment orders from courts. If you receive a garnishment order in regard to one of your employees, there are very specific steps that you must take in order to comply with the order. You need to make sure that you understand the garnish process and comply with the order in a timely manner. The failure to do so can have financial consequences for your business enterprise.
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Instructions
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Familiarize yourself with the law governing the type of wage garnishment that you have received. Because wage garnishments issue from a variety of sources--employers, debt collectors, federal governmental agencies and state governmental agencies--you must know the specific rules associated with a particular wage garnishment. You need to make sure that you understand the time line that you are operating under in regard to a particular garnishment.
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Obtain information on the specific laws and rules regarding a wage garnishment request you have received either from materials that were provided along with the garnishment order or from an original source that contains applicable law. An excellent source of the law can be found online through law library websites maintained by law schools.
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Typically if the next payday is 10 days after you receive the garnishment order, withholding must begin at that time. If the next payday is within 10 days after receipt of the garnishment order you have the option of starting the garnishment on the next payday or waiting until the second payday.
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Determine if the wage garnishment order is ongoing (child support, repayment of student loans, payment of taxes) or a one-time request (certain debt collections).
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Calculate the percentage of the employee's net pay that you will withhold pursuant to the order. Normally, a wage garnishment order will contain the formula you need to use to determine how much money you can withhold from a paycheck. Most states have additional laws that regulate the maximum amount that can be withheld from a check, depending on what the purpose of the garnishment. If the garnishment is for child support, the percentage that can be withheld likely will be higher than what is permitted for a consumer debt collection effort. Again, if the garnishment order does not contain this information, you can access it through online libraries maintained by law schools.
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Confirm that if there is another wage garnishment pending against an employee that a second garnishment can be initiated. The laws in this regard vary from state to state. You need to take advantage of the online resources mentioned previously, as well as guidebooks like "Garnishment: A Practical Guide" by Vicki Lambert, to understand wage garnishment order priority.
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Convey the withheld wages to the clerk of the court that issued the garnishment order. By sending the payment to the clerk, you will have official documentation that you have satisfied the terms and conditions of the garnishment order. Normally, a check from your business account will be an appropriate method of making payment.
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Use the answer form that accompanies the garnishment order if you determine that you cannot garnish wages. You cannot garnish wages if the employee is no longer with your business, another garnishment order is in place which precludes any further withholding, or some other legally justifiable reason exists to prevent a garnishment.
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Tips & Warnings
If you have a payroll service for your business, that company will be able to deal with a garnishment order.
If you fail to comply with a wage garnishment order, the entity seeking the garnishment has the legal ability to sue your business for any amount of money that should have been withheld. Your business is 100 percent liable for money that you failed to garnish properly.
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