To garnish is to withhold part of an employee’s wages on behalf of a creditor or another third party — typically in response to a court order.
See our video featuring certified public accountant and small business consultant, Noel Lorenzana, on how garnishments work.
More about garnishing
When wages are garnished, funds are taken directly from an employee’s net pay (these are their post-tax earnings). While the most common wage garnishments are for child or spousal support, they can also be for:
Unpaid taxes
Student loans
Lease defaults
Credit card debts.
Employer responsibilities: Handling a garnishment
If you receive a wage garnishment order, remember that it’s a legal requirement, and not a request you get to choose to respond to. By the time the notice reaches you, legal decisions have already been made by a court or government agency. Your role is to act as the in-between, which means following the instructions.
It will share the exact dollar amounts to withhold (usually ranging from 15% to 50% of take-home pay depending on the type of debt), where to send the funds, and when to start garnishing the wages.
Example calculation: If an employee’s take-home pay is $1,000 after taxes, and the garnishment order requires $200, their final paycheck will be $800.
How to talk to an employee about a wage garnishment
Talking about wage garnishment isn’t usually what employers and employees want to discuss. But if you have to take action on one, it’s a good idea to notify the staffer privately as soon as you receive the paperwork.
Though it can be stressful, and an employee may even ask if it’s something you can ignore, being clear and acknowledging you can’t just not pretend you didn’t receive it is not an option. Here’s one way to bring up the topic in a thoughtful, but direct way:
“Hi (employee name), I received a court order requiring me to withhold money from your paycheck. I know this isn’t what you want to hear, and I understand this isn’t easy to talk about it, but I am legally required to follow it. Let’s look at what this means for your paychecks going forward.”
What does garnish mean? Let’s use it in a sentence
“If I don’t pay back these loans, they’re going to garnish my paycheck.”
Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.
