How do businesses handle wage garnishment?

Employers must calculate the correct amount to withhold from an employee’s disposable earnings, which are the wages left after mandatory deductions like FICA taxes. If an employee has multiple garnishments, employers must also follow specific legal rules to determine which ones take priority. Many payroll solutions include features that automatically manage garnishments, helping streamline the process and reduce the risk of errors.

What are the legal limits on wage garnishment?

The percentage of wages that can be garnished depends on the type of debt and is governed by both federal and state laws. Some states enforce stricter limits than federal guidelines, but in all cases, legal limits are in place to protect employees from losing too much of their income to garnishments.

What happens if an employee refuses wage garnishment?

If an employee refuses wage garnishment, the employer must still comply with the court order or government directive. Failing to comply with the order can result in legal consequences for the employer, including fines or being held liable for the amount owed.