How to handle wage garnishment of one of your employees

Nowadays, it is not uncommon for employees to have some sort of wage garnishment on their earnings. It is important the employers comply with all laws are regulations regarding wage garnishment.

The following is a brief explanation of how to handle wage garnishment of one of your employees should the situation arise:

What is wage garnishment?
Wage garnishment involves an employer withholding a specified amount or percentage of an employee's earnings. This is usually to pay a debt as the result of a court order or other similar procedure. Common situations that result in wage garnishment include child support, alimony, or a lawsuit.

When it comes to wage garnishment, employers must follow the guidelines set forth by Title III of the Department of Labor.

What is Title III?
Title III has a number of rules and regulations regarding wage garnishment. It goes over the employee's rights as well as the employer's responsibilities regarding wage garnishment and what employers can and cannot do to employees whose wages are being garnished. Some main points include:
- Title III prohibits employers from firing an employee as a result of being subject to wage garnishment. However, employees are not protected from being laid off under Title III if their earnings are garnished for a second debt.
- Title III limits the amount of earnings that can be garnished in a work week or pay period. This limit applies to employers no matter how many wage garnishment orders are in effect for an employee. With regards to child support, Title III states that up to 50% of your employee's disposable earnings can be garnished if the employee is supporting his or her child.

How to handle wage garnishment
When an employee is to have his or her wages garnished, employers will be notified of wage garnishment via an Earnings Withholding Order.This is issued by the sheriff or another registered process server within 180 days following the Writ of Execution that comes from the court system.

Once you receive the order, you must then determine the amount to be withheld from the paycheck, and then make the deductions each pay period until the order is satisfied. In cases of child support, these are typically more long-term. This amount is typically around 25%, but some exceptions are made for lower-income workers.

Once you have received the order, you as the employer must complete the Employer's Return and mail it to the sheriff within 15 days of the date of service. Failure to do so could result in penalty of perjury.

In some cases, the employee will not agree with the garnishment and take the matter to court. This is the only way it can be legally withdrawn; in the meantime, you as the employer must continue to obey the court order and deduct wages until further notified by the court.

What if the employer fails to comply?
Employers who do not comply with a wage garnishment order are then liable for penalties and suits to recover the money that come as a result, in addition to any of the attorney's fees and costs, and even punitive damage in some cases.

Wage garnishment can be complicated, so make sure you fully understand Title III and all of your responsibilities with regards to withholding income.