Continuing wage garnishment summons and answer affidavits—what a pain. You’ve all received them and responded to them. Most of the time, legal services are not required, and your attorney probably isn’t even aware that you received the garnishment summons. But we’ve seen a recent rise of collection firms being more aggressive and sending out discovery requests and seeking to hold the employer liable for the entire judgment amount because the employer failed to timely respond to the garnishment summons, or got tripped up on a technicality on some small aspect of the garnishment calculations. Unfortunately for the employer, the law is on the side of the collection firm and the employer can be held responsible for the entire judgment—not just the garnishment amount—plus attorneys’ fees and costs which can get very expensive, very fast. So, while most employers are familiar with garnishments (or have a third-party payroll administrator), it’s still extremely important to remember the basics when it comes to garnishments.
First, you have the earlier of seven days after the end of the employee’s current pay period or 30 days after the garnishment summons is received to file a response to the garnishment. Most employers fall into the category that requires a response within seven days at the end of the employee’s current pay period. This time period allows you to make the garnishment calculations on the form sent by the collection firm, notify the employee of the garnishment and their right to make exemption claim(s), and get the garnishment answer affidavit filed with the Court. That’s quite a few things to do in a short time period, so don’t wait until the last minute.
Second, a continuing garnishment needs to be completed every pay period because the employee’s wages may change, withholdings may change, or the employee may file for an exemption. Continuing wage garnishments, regrettably, are not a one and done.
Third, there may be a situation where an employee has multiple garnishments. If this is the case, child support garnishments will take priority followed by continuing wage garnishments for unpaid debts. In the answer affidavit, notify the collection firm of the current garnishment but (and this is a big but) make sure to start withholding under the second received garnishment once the current garnishment expires at the 180-day mark. We’ve seen too often where an employer does everything right when a garnishment summons is received, but then forgets to withhold on the second garnishment when the current garnishment expires.
Fourth, you can’t take any adverse employment action against an employee because of the garnishments. Yes, the garnishments take time—especially when the wages fluctuate, there’s a short pay period, and there are multiple garnishments—but an employer will be in hot water and face legal action for taking any adverse employment action based on the employer’s legal obligation to comply with garnishment laws.
Fifth, be on the look-out for a bankruptcy stay. If the employee whose wages are being garnished files for a personal bankruptcy, the bankruptcy court may file a “stay” which keeps all creditors away from the debtor/employee until the bankruptcy plan can be established. If you receive any bankruptcy stay paperwork from the court, the employee, or the employee’s attorney, cease all garnishments immediately, and be sure to inform the creditor’s attorneys via the garnishment answer that you have ceased the garnishments because of the bankruptcy stay.
Finally, don’t panic if you complete a garnishment answer affidavit incorrectly or miss it altogether. Mistakes happen and you’re busy running a business. This is often the point when your attorney becomes involved and works with the collection firm to resolve the garnishment misstep. We have handled these situations many times over the years, and usually an acceptable resolution can be reached.
Garnishments aren’t fun, but they’re the law. Keeping in mind some of these basic points should make the process easier. If you run into trouble, just let us know and we’ll be glad to assist.