Garnishment Orders affect not only the employee in question, but also the employer. If you receive a Garnishment Order for one of your employees, you have one more legal financial responsibility to deal with. This can sound stressful but with the right information, this legal requirement can be a smooth adjustment. Here is what you need to know:
What is a Garnishment Order?
It is a legal process that requires the employer to withhold and send a portion of their employee’s wages to the specified entities. Orders can be a result of the employee in question needing to pay child support, legal debts, loans or bankruptcy processes.
How Do I Know How Much to Withhold?
The Order will be delivered with express written instructions and typically withholdings are a flat amount or a calculated percentage of wages earned. Whatever the amount, you will need to withhold and provide it directly to the creditor. All forms of wage such as bonuses and commission, excluding tips, should be included. There is typically a wage garnishment calculation sheet included with the order for reference. If you’re unsure of the correct amount contact the issuing court or agency immediately. (Also, make sure to read the section of the order on withholding limits)
Is There Anything Else I Need to Do?
A written response form must be sent within 7 days of receiving the Garnishment Order, confirming your compliance. Though your employee will probably be well aware of the order, you should also officially notify your employee of the Order being carried out before it begins, specifying the beginning date and amount directly with the employee.
In What Situation Would I NOT Comply?
Your employee will have a specified amount of time to contest the Order. You should then immediately stop paying the funds to the creditor - they should instead go to the issuing court or agency. If you receive an express notice of termination or receive an “End Date” on the original Order form, you should stop collecting and paying the Garnishment on those indicated dates.
Other than these base knowledges, you will only need to be careful in how you calculate the totals in the case it is a percentage. In the case there are multiple Garnishment Orders on one employee, you should give priority to orders that were received first and immediately contact the issuing court or agency with any questions.