Although the laws vary from state to state, garnishment is a tool
used by creditors to satisfy the indebtedness of an employee. It is a
court order so it should never be ignored by the person or company
receiving it. If you as the employer fail to comply with it you can be
held responsible for your employee debts.
For this reason you need to be fully aware of the standard methods for dealing with a garnishment. You also need to be careful with the actions you take if you are ever served with one.
Always Answer A Court Order
When a garnishment is served upon an employer, the court usually provides paperwork that the employer must complete and return. Even if the employee no longer works for the company, the employer must file an answer with the court and explain why the company is not able to comply with it. In some states, employers who fail to answer can become responsible for the employee's debt by default.
Do Not Fire the Employee
Unless the company has a written policy stating that wage garnishment is a terminable offense, employers should not fire an employee if this happens for the first time. The Consumer Protection Act (CCPA) prohibits the firing of an employee due to one single garnishment, and some states offer additional protections to citizens. This protection may not extend to an employee who has accumulated multiple debts and is sued by many creditors.
Types of Repayment
A non-continuing garnishment has to be completed in one single payment regardless of the amount. This can be difficult to bear for someone with an average salary.
A continuing garnishment is spread over several months and remains in effect until the debt is paid in full, so this may require multiple payments.
The type determines what percentage of disposable earnings is allowed to be deducted. This may also vary by state.
States With Restrictions
Pennsylvania, South Carolina, North Carolina and Texas do not allow garnishment for creditor debts. However, all states do allow it for tax liens, student loan defaults, child support, and in some cases, alimony.
Many employers are unaware of the laws surrounding wage garnishment, especially the fact that ignoring a court order could make them liable for the employee's debt.
Therefore, it is important to understand the laws in the states where your business operates to be sure that your company complies with them.
For this reason you need to be fully aware of the standard methods for dealing with a garnishment. You also need to be careful with the actions you take if you are ever served with one.
Always Answer A Court Order
When a garnishment is served upon an employer, the court usually provides paperwork that the employer must complete and return. Even if the employee no longer works for the company, the employer must file an answer with the court and explain why the company is not able to comply with it. In some states, employers who fail to answer can become responsible for the employee's debt by default.
Do Not Fire the Employee
Unless the company has a written policy stating that wage garnishment is a terminable offense, employers should not fire an employee if this happens for the first time. The Consumer Protection Act (CCPA) prohibits the firing of an employee due to one single garnishment, and some states offer additional protections to citizens. This protection may not extend to an employee who has accumulated multiple debts and is sued by many creditors.
Types of Repayment
A non-continuing garnishment has to be completed in one single payment regardless of the amount. This can be difficult to bear for someone with an average salary.
A continuing garnishment is spread over several months and remains in effect until the debt is paid in full, so this may require multiple payments.
The type determines what percentage of disposable earnings is allowed to be deducted. This may also vary by state.
States With Restrictions
Pennsylvania, South Carolina, North Carolina and Texas do not allow garnishment for creditor debts. However, all states do allow it for tax liens, student loan defaults, child support, and in some cases, alimony.
Many employers are unaware of the laws surrounding wage garnishment, especially the fact that ignoring a court order could make them liable for the employee's debt.
Therefore, it is important to understand the laws in the states where your business operates to be sure that your company complies with them.
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