A wage garnishment is just a fancy term for withholding money from an employee’s paycheck to help them pay a debt. Courts can order you to withhold and pay these funds to the appropriate agencies.
So what do you do if you get a wage garnishment order for one of your employees?
- Read the garnishment papers thoroughly. These time-sensitive papers will be mailed to you, and they’ll tell you exactly what to do to.
- Tell your employee. Make sure they’re aware of this obligation and know the money will be coming out of their paycheck. Usually a send copy is sent so you can easily hand it to your employee.
- Respond to the garnishment. They may ask you for info about your employee, so be sure to respond with whatever they request by the deadline they set.
- Withhold and pay. Determine how much to withhold based on the garnishment order and federal and state laws. Once you land on that amount, send the payments to the right people. If you have any questions, contact the agency that sent you the garnishment.
- Learn more. There are federal and state laws that govern garnishments, the max amount you can withhold, your employees’ rights, and more. Check out the Department of Labor for more info on the federal level, and research wage garnishment laws in your state to cover all your bases. It’s up to you to make sure you do your research and comply with the request correctly.
Updated August 18, 2017
This article provides general information and shouldn’t be construed as tax advice. Since tax rules may change over time and can vary by location and industry, please consult a CPA or tax advisor for advice specific to your business.