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What to Do When an Employee's Wages Are Garnished

What to Do When an Employee's Wages Are Garnished
Pat Dickson - Tue May 08, 2012 @ 02:17PM
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If you are an Arizona employer and one of your employee's wages are garnished, doing three (3) simple things will usually cover all your bases. Generally, your involvement in a garnishment proceeding begins with your being served a Summons and Writ of Garnishment.

Here is what you do:

1. Do not retaliate. Do not fire, sanction, reduce hours, take payroll deductions beyond those allowed by the court, or otherwise retaliate against an employee just because he is being garnished. The law forbids employers from retaliating against an employee for being subject to any number of garnishments tied to any single judgment or debt. Even if there are several debts, it is my opinion the best action is to just stay out of your employee's financial affairs. Focus only on your employee's performance at work, not his social life, or his financial situation. Additionally, keep your employee's garnishment proceedings confidential, and on a need-to-know only basis. In most cases only a responsible officer and Payroll personnel needs to know of this matter. 

2. Fill out the provided forms and return them. Your initial job is to begin by filling out the Answer and other provided documents, and returning them, usually within ten (10) days. You will state whether you employ the garnished employee, his employment periods, and how much you pay him. You are only required to provide the information requested, to fill it out honestly, and to send it all in before any deadlines expire. It is not your job to argue your garnished employee's case. He failed to win at court, or perhaps even to appear, and has a judgment against him. Because he didn't pay his judgment debt in a timely manner, the law is now making you pay his creditor for him, by taking money out of his check. Maybe your employee has a good argument he is hardshipped or that he should not be subject to the garnishment, but that is his job, not yours. He is the one required to ask for a hearing and to argue the case his paycheck shouldn't be garnished. In your case, just follow the instructions, answer honestly, and send the required forms back. If you don't, you could end up in contempt of court. You could be fined, ordered to pay your employee's debt, and to cover court costs and attorneys' fees.

3. When the court order comes, pay the garnished amounts. Keep paying until you receive notice the debt is satisfied, or you are otherwise ordered to stop. Should you do otherwise, as discussed above, you could be held in contempt of court. You could even end up paying the same wages twice! Once to the employee, and once to his creditor.

As a final note, Arizona law allows up 50% of an employee's post tax wages to be garnished for matters or judgments involving tax obligations or support. If general debts or judgments for things like credit cards, contract disputes, or car payments are involved, up to 25% of post tax wages may be garnished. Arizona law allows an employee to argue hardship, and if he is successful, his obligation can be reduced to as low as 15%. If there are multiple garnishments, they still cannot exceed these above-listed percentages. Also, Federal Law protects employees so they cannot be garnished, for any reason, if they make $217.50 per week or less, meaning a person always has $217.50 per week to live on.

References:

Arizona Supreme Court - Garnishment Instructions and Forms

Consumer Credit Protection Act - The Federal Wage Garnishment Law

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