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The Most Frequently Asked Questions About Wage Garnishments - Part One

Posted on Mon, Aug 13, 2018 @ 07:00 AM

What is a garnishment? A court or State required deduction.

Do I as the employer have to respond to it?   If it is a court order, you are required to set this up for payroll deduction within 10-14 days or your next payroll processing.

What happens if I do not? If you do not acknowledge the court order, you as the employer can be held in contempt of court and could be required to pay the order off in full.

What are the most common types of garnishments? There are 7 most common types of garnishments: Child Support, Creditor Garnishments, Bankruptcy, Student Loans, Tax Levy (State and Federal) Voluntary Wage Assignment and Involuntary Wage Assignment.

Are all garnishments public record? Child Supports are never part of public record due to the nature of information presented on the order.

How do I determine if my employee makes enough money to collect for the garnishment(s)? You always start out taking their Gross Earnings – Taxes to determine their Disposable Wages. The Disposable Wages is the maximum amount you will have to work with for the order.  Once you have determined this amount you will follow the court order to determine how much of these wages are to be withheld for the court order.  You do not subtract any prior deductions such as 401(k), health insurance, etc from these wages prior to determining the court order amount.

If I have questions about the order or interrogatory I have received who do I call? You will always contact the issuing entity(requestor) for any questions on the document.  TruPay can only assist you with the setup of the deduction we cannot assist with understanding/clarifying the court paperwork.  The exception to this is if you are using TruPay’s Full Garnishment Services product, in which case, you will simply send over the paperwork.  If you are not sure if you are signed up for this service, please contact TruPay and ask for the Garnishment Services Department and we can assist you with determining this.

What do I do if I receive a court order and my employee already has one in place? Depending on the type of existing order, if it is a Child Support order, this will still take priority for deduction.  If it is another % based garnishment and it is not already for maximum 25%, then you can withhold up to the difference of the 1st order and 25% for the 2nd  Example:  1st order is 15% and the 2nd order is 25%, you can only withhold up to 10% for the 2nd order.  You will always want to contact the issuing entity on the 2nd order to let them know you will be withholding for a lesser amount and why.  There can a few exceptions to this rule, so make sure to always read the order thoroughly, and contact the issuing entity if questions.

How many court orders can I collect on from my employee at one time? Is there an order of priority for collecting on more than one order?  The number of orders you can collect for at one time, is determined by the types of orders you have on that employee.  There is no limit to the # of child support orders that can be collected for at one time.  Garnishments will following a priority basis and as stated in #8, the % of the orders will determine how many can be withheld.  Some States have very specific rules of how to collect garnishments, so you will want to make sure you are familiar with those rules to determine what you are required to do.

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