In September 2011, The Georgia Supreme Court adopted an advisory opinion from the State Bar that anyone not licensed to practice law, such as payroll clerks or human resources employees, cannot legally answer garnishment orders.
For businesses in Georgia without an in-house legal department, this means hiring outside counsel to review and respond to garnishment actions, says Georgia-based attorney Matt Simpson, with Fisher & Phillips LLP. This means that an already oft-misunderstood aspect of payroll accounting just got more complicated, at least in Georgia.
The ruling raises the question: Just what is a business’ responsibility regarding wage garnishments? Here are five steps to help you better understand and address this situation, should it arise at your company:
1. Review state law first. Make sure your legal counsel is current on state law regarding the issue, which can vary widely between jurisdictions. “In some states, the requirements are more onerous,” Simpson says. For example, there are procedures in some states for recouping administrative costs. But they can be outdated, and not reflect the true costs, as is the case in Georgia.
2. Discuss the issue. Simpson advises employers to sit down with the worker whose wages are being garnished and explain that any problems the worker has need to be raised with the creditor or the court. “Employers need to explain that they have to garnish until they get a court order telling them otherwise,” he says.
3. Avoid terminating the affected employee. While it’s clear that a worker can’t be fired for having a garnishment, it is not as clear when there are multiple garnishments. However, Simpson advises, it’s a bad idea to play with the law. “That’s an awfully risky loop hole to take advantage of. We advise our clients not to take action,” he says. Simpson notes that if a Department of Labor complaint is filed about a termination being linked to garnishments, even if that ruling is in the employer’s favor, it can open up an investigation into other issues.
4. Review all documentation. When you receive a garnishment order read it closely, Simpson advises. Procedures can vary widely by state, including the amount that can be withheld. Pay particular attention to when you have to respond and how much you have to withhold.
5. Do not ignore the order. A common mistake made by employers is failing to respond to the garnishment. “It’s a relatively common problem for employers to get a garnishment and the employee is no longer with them, or they don’t make enough money, and since they don’t have to send money, employers sometimes assume they don’t have to respond to the court,” Simpson says.
The case in Georgia may be unique, but it still serves to draw attention to a matter that affects businesses nationwide. By making sure you aware of the risks and responsibilities associated with garnishment in your state, you will be better able to protect your company and staff from liability.