Two definitions exist for the word “garnishment.” One is like the sprig of parsley on your dinner plate: mere ornamental dressing to which you may not pay any attention.
The other kind, however, you absolutely cannot afford to ignore – and they’re on the rise! Whether the court has ordered you to seize a portion of an employee’s wages for unpaid medical bills, overdue student loans, credit card debts, child/spousal support payments or whatever, you must comply.
The stakes
Complying with accuracy is critical, as mishandled garnishments may result in your company facing multiple violations and severe financial penalties.
Employers may be held liable for 100 percent of improperly handled garnishments, as well as the pending legal fees that follow. Typically, employers must respond to an order of garnishment in five to 14 days.
The stats
Seven percent of the U.S. workforce has had wages garnished. That may not seem like a staggering percentage, but when you consider $1 billion is collected each year through garnishments, it makes it hard to ignore.
Since 2006, the number of garnishments collected has increased by 40 percent and it is only growing each year.
For 2015, the median number of garnishment payments per employer was 360, regardless of pay structure; sixty more than in 2013. The typical garnishment order is for child support, but it isn’t the only type: in fact, 68 percent come from creditor debt and 64 percent come from federal tax levies.
The safe bet
Alleviate the headaches of administering garnishments by outsourcing. Invest in a HR and payroll solution that will handle garnishments from receipt of the order to the last payment or expiration, and everything in between. For added assurance, consider a single-application solution that:
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- administers and sends payment and required documentation
- eliminates your risk for liability
- prevents costly errors and hours of research
- sets garnishment limits and priorities
- communicates with third parties
By outsourcing, you get rid of the hassle of garnishments before garnishments have the chance to hassle you.