Garnishment of wages
JACHR1979
20 Posts
I just received a request from a collection agency to garnish the wages of an employee who is default on their school loans. Am I required to comply since it isn't the government garnishing the wages? Have any of you ever had this happen? I've never had a collection agency try and garnish a person's wages before.
Comments
What state are you in? It is going to be dependent on state laws. Some allow for more garnishments than others. For example, Texas allows for child support, IRS and government student loans, but not for non-govt student loans nor for other creditors.
I suspect might not have to honor it, but I hate to say that unequivocably.
Yes, you have to comply-if you do not garnish the wages, your company can be held libel for the amount owed and can sometimes be sued. There are different types of garnishments, chances are the collection agency is working for the state that is owed for student loans. There should be instructions on what to garnish(with this type of garnishment, it is typically a percentage of the pay-between 10 and 25%) and who to send the payments to. My advice is enter the garnishment, send a copy to the employee and if they dispute the garnishment, they will have to take it up with whomever is garnishing their wages. if you look at the paperwork, there might be specific laws quoted regarding the garnishment.
Garnishments can be child support, Federal or state taxes, student loans or even private debts. the paperwork you recieve for each will normally explain which it is and what is required, how much you are expected to withold etc...
basic rule of thumb: child support always comes first, the IRS can typically take as much as they want-up to 50% of gross income for a federal levy. most garnishments can take up to 25% of pay-but must typically leave the employee with a min of 30 hours at min wage(federal of $6.55) so if their gross pay is not equal to that-the full 25% won't be taken. child support in some cases can take up to 60% of pay-depending on the state and if it's in arrears. Hope this helps
What state are you in? It is going to be dependent on state laws. Some allow for more garnishments than others. For example, Texas allows for child support, IRS and government student loans, but not for non-govt student loans nor for other creditors.
I suspect might not have to honor it, but I hate to say that unequivocably.
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good point, I believe North Carolina is another state that doesn't allow certain garnishments, I deal very rarely with Texas and North Carolina-almost every other state yes, those two not so often. Do you have a payroll source book? that should have information on what's okay and what is not. if not google or visit the DOL website for the state the employee lives in to verify if you can withold, but if you can't because of state law-you need to respond to the company/agency who sent you the garnishment or risk being held libel.