Wage Garnishment for Employers
Wage Garnishment for Employers
What do you do, as an employer, if one of your employees gets a wage garnishment judgment against them?
Wage Garnishment for Employers is an important topic to consider because you could possibly be financially responsible for the money your employee owes.Here are the three things you need to know as the employer so that you and your business are fully protected against becoming liable for a wage garnishment directed to your employee.
1) You must respond to the wage garnishment.
No, you are not the one who owes money, but the garnishment is against you and your business. You, as the employer, have 30 days to respond to any garnishment you receive from the date you received it. Wage garnishment is in essence a mini lawsuit that has been made against your business; therefore, you must respond to the issued wage garnishment to be legally protected.
You, as the employee will receive interrogatories. Interrogatories are questions that you must answer and sign under oath concerning your employee. Questions you will be asked include: Does this person work for you? How are they paid (weekly, bi-monthly, monthly, commission)? What rate is this person paid? These are the types of questions you will be required to answer and send back to the garnishor. (That is the person with the judgment or their attorney.)
It is only after you have responded to the interrogatories that the garnishor can go to court to get the wage garnishment ordered. At this point, you will wait for a court order before you start to pay the wages in question. Never pay out any wages without an order from the court.
If the person in question does not work for you, you must still respond to the interrogatories and answer the questions to protect yourself from legal responsibilities.
If you fail to respond to the interrogatories, you could be held legally and financially responsible for the wages that are in question.
2) You must immediately withhold wages.
As soon as you are notified of the wage garnishment, you must immediately start withholding wages from your employee. You will need to start withholding up to 25% of their pay so that you can pay the withheld wages as soon as the judgment becomes court ordered. It is important to note that you will not pay out this money until you have a court order issuing the wage garnishment. The courts will expect you to already have 25% of the wages that have incurred during the process of getting the wage garnishment though the court system. The money you have been collecting will be due as soon as the court order is signed by the judge.
In Arkansas, the legal amount you are allowed to garnish is only up to a total of 25% of your employee’s wage. If there are other judgments or garnishments against your employee, the total of all of these can only equal a total of 25% of their pay. It is important that the total of all wage garnishments does not exceed 25%.
3) Inform your employee about the garnishment.
When you receive a wage garnishment notice, you must inform your employee of the garnishment and how much you will be deducting out of their paycheck. Your employee is supposed to get a letter in the mail, but you want to be sure they are aware of the garnishment before it is withheld. You will need to inform them that you will be deducting a specific amount from their paycheck including any fees.
As the employer, you must decide if you will charge a processing fee to pay for writing additional checks, bookwork, or postage. You can charge these fees to your employee, but you must communicate this upfront.
We want to help you through the process of wage garnishment if you are served an interrogatory. We can help you sort through the paperwork so you are legally protected from any financial responsibility. The best thing to do when you receive the garnishment is to call the Story Law Firm so you can take the needed steps to protect yourself and your business.