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What Employers Need to Know About Wage Garnishment and Payroll Practices

To stay in business and ensure your employees are getting paid, you must be updated on the laws and regulations. If you’re not, you can end up losing money and possibly your employees, so it’s essential to be aware of what you can and can’t do.


Wage garnishment payroll is a practice that occurs when an employer instructs a creditor to pay a portion of the employee’s wages. The IRS and other private creditors use this to collect on a debt. The IRS can garnish wages, bank account funds, and assets. The amount of money that can be decorated depends on the individual’s disposable income. For example, employees’ disposable earnings include their total compensation less mandatory deductions. Several income exemptions can protect some of your wages from being garnished. These include your pension payments, Social Security share, and health insurance.

Unpaid Social Security and unemployment benefits

The federal government and some states also garnish portions of unemployment and Social Security benefits. However, this doesn’t mean that all employers are equally on the hook. Fortunately, some simple steps can help to reduce your liability. A good starting point is to consult with a professional. This will enable you to be sure that your plan complies with all applicable laws and regulations. In addition, a professional can assist you in remitting funds to the correct agency. The IRS, state, and local governments are among the entities that can garnish wages to collect unpaid taxes. In addition, you may have to pay penalties for failing to comply with a court order to garnish a portion of your salary. Wage garnishments have complex rules governing how much money to withhold from an employee’s pay. In addition, there are specific forms for various kinds of garnishments. It’s important to know what you’re up against and have the plan to deal with it. For instance, you can remit the money to the right agency in time and save yourself a lawsuit. There are many forms of debt, so it’s best to research. For example, if your employees receive Social Security and unemployment benefits, the best bet is to ensure that you comply with all applicable laws. Some of these laws require that you pay a certain percentage of the amount you pay your employees into an Unemployment Compensation Fund. Other laws dictate that you must make the appropriate election in writing to the fund administrator.

Unpaid child support and spousal support

If you are behind on your child support, you may be facing the possibility of having your wages garnished to pay back the money you owe. Wage garnishment is the most common method of collecting overdue support. Wage garnishment can be based on unemployment, hardship, changes in your income, or other reasons. The court can order your employer to withhold up to 50% of your wages. A court can call you to stop garnishing your wages if you have filed a motion. However, you will need to file a petition and show proof of your case. Other types of arrearages you can collect from the government are Social Security income, pensions, tax refunds, and workers’ compensation benefits. You can collect up to 25% of your net wages for most debts.

If you are a custodial parent behind on your child support, you can ask the court to issue a judgment for the amount you owe. Alternatively, you can register a sentence in another state. If you need help handling income withholding, you can speak with a lawyer or child support enforcement agency. Both agencies will help you arrange the process.

Unpaid credit card debt

Wage garnishment is when a creditor takes a certain amount of money from a debtor’s paycheck. It can be used to pay back credit cards or other unpaid debt. Wage garnishment is legal and has many rules and regulations. You can stop wage garnishment permanently by filing for bankruptcy. This option is often a last resort. You can receive free credit counseling before you file for bankruptcy. Credit counselors can advise avoiding wage garnishment and help you create a repayment plan. They also offer free consultations.

In most cases, creditors must first win a lawsuit before they can garnish wages. However, there are exceptions for federal taxes and student loans. Exceptions may also apply to unpaid child support. To avoid wage garnishment, you should contact your creditor if you’re behind on payments. If your debt collector files a lawsuit, you have the right to receive a notice of the case. Typically, you’re given 30 days to respond to the court order. Once the court order is in place, the employer must obey the court’s request. Some states have stricter rules for wage garnishment than others. The Department of Labor sets guidelines for how much disposable an employee can earn. The amount is calculated by subtracting legal tax obligations from gross earnings. Additional deductions not required by law include health insurance, union dues, voluntary wage assignments, and contributions to charitable causes. If you can’t pay your debt, you can stop the garnishment by filing for bankruptcy. Depending on your financial situation, you can negotiate a settlement. However, this is more challenging than you might think.