The Burden of Garnishments: What’s An Employer To Do?

By Michael Fagan

Garnishments may impact all employers, regardless of size, industry and geographic location.  Employers have no choice but to timely process and comply with garnishments that have been properly filed and which have complied with the legal prerequisites for attaching an employee’s wages. 

The challenge facing employers is that processing garnishments is often manually intensive because the forms vary greatly from state to state, county to county and from federal government agencies to state agencies.  The lack of uniformity of the orders that compel an employer response complicates an already burdensome process. 

The penalties for non-compliance can be severe ranging from a simple penalty and interest payment to the onerous obligation to pay the creditor the full amount it is owed.  Employers must therefore efficiently and timely process garnishments.

Faced with such a manually intensive process, employers normally take three approaches to stay out of trouble: 

  1. Subcontract the entire process to their payroll provider;

  2. Develop a large staff if volume demands and train them to process the paper, respond to the garnishments, track the deadlines within which to respond and store the paper either internally or with an external vendor;

  3. If volume is low, add processing garnishments to someone in HR and/or payroll and ask them to gain the expertise required to process, respond to timely and ensure the wages are garnished.

Each of those options poses risks and can result in higher costs than necessary to ensure compliance.  Payroll providers are skilled at transferring funds and ensuring payment is made.  However, there is no assurance that their employees have the expertise to ensure that correct information is captured from the documentation they receive or that the garnishments occur in a timely mmner.  In addition, the payroll provider may need to receive information from or send it to systems other than payroll with which they are not integrated such as HRIS systems, to confirm that the right employee’s wages are garnished.  Internally, managing garnishments with a dedicated staff increases cost in the form of labor expense and storage costs, whether internal or external.  Asking an existing employee(s) to add garnishment processing to their regular duties risks errors because the process is still manual, but they may not possess the expertise that is gained from doing so on a full time basis.

So what is an employer to do?  Archive Systems’ FileBridge Digital technology is purpose built to automate paper intensive manual processes such as garnishments.  We work with our clients to fashion custom built processes that maximize existing technology systems, leverage the expertise of dedicated staff while automating the process in a way that streamlines the process, ensures greater adherence to deadlines, and allows the company to securely share garnishment documentation across the enterprise by simply clicking their mouse.

 

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