Some employees can work in jobs their entire life and never know anything about wage garnishments. As employers, you are probably not as lucky. Chances are that at some point you will be asked to garnish the wages of an employee. Do you know what to do?
Usually employers receive notification saying a court order has been issued that requires you to garnish the employee’s wages. Different states have different requirements. In Indiana, the order designates when to begin the deductions, the amount to be deducted and where to send the money. Employers are required to comply, and it doesn’t matter if they are a small business or a big business. The Payroll Department makes the entire transaction for employers easy. We ensure the deduction is made and remit it to the designated party.
As a payroll provider, we often get requests from employers to “hold off this pay period.” We are processing the payroll for the employer and make no decisions in that regard, but such requests must be made in writing and we notify the state office a payment is not coming.
What are garnishments for?
A garnishment is most often the result of a divorce, tax delinquency or other court settlement and the garnished amount is going to another party. It could be a former spouse, a former landlord or other debt holder. When the funds are not taken from the paycheck and sent, the person or people at the other end receive nothing.
A garnishment can be for delinquencies or arrearages or for continuing payments like child support. No one, including employers, payroll services or employees, can change the amount to be deducted or elect to suspend a garnishment order. All changes have to go through the court or the agency (such as the IRS) initiating the original garnishment.
How do employers know to stop a garnishment?
The garnishment notification includes a beginning date but not an ending date. Once the total amount is satisfied or the term of something like child support has ended, the employer receives a termination notification stating the garnishment can be removed. The employer just needs to send the notification on to us and The Payroll Department takes care of the adjustments to the employee’s pay check. We take the hassle out of the process for employers.
Elaine of The Payroll Department Blog Team