Hidden Garnishment Issues
With continuously evolving employment laws across the United States, an area that does not typically receive a great deal of attention from employers is garnishment laws.
Garnishments can be sent to an employer from a number of agencies including state or federal court, the IRS or other state tax agency, a creditor who has filed a formal judgment or a student loan administration company. In recent years, case law has brought an employer’s responsibility in processing garnishments—and their ultimate liability if they are not processed correctly or in a timely manner—to light. When this happens, the creditor looks to the employer, not the employee, to satisfy the entire amount of the garnishment—and there is no cap on the total amount of that garnishment.
Many garnishments require an answer or response to the requesting agency within 7-14 days; therefore, when you are served with a garnishment, it is important that you review and process it immediately.
When a garnishment is being taken out of the employee’s paycheck, many employees say they do not know the creditor and did not know there would be a garnishment, but we have found that agencies make several attempts to contact the employee prior to garnishing their wages. In fact, the IRS may attempt to make contact for years before they issue a garnishment.
If the employee seems surprised by the garnishment, it is important for them to contact the requesting agency to try to resolve the issue. Most student loan, credit collection and tax agencies will work out reasonable payment options. Most agencies do not want to garnish an employee’s paycheck, just as much as the employee does not want it to happen.