There’s good news for your Payroll department.
No longer will staffers get migraines sorting through tedious variations in multiple states’ garnishment laws. A standardized law has been written for all states.
Now that the Uniform Garnishment Act is complete, states will be able to adopt the law as their own – if they choose to do so.
This standardized legislation, prepared by a nonprofit called the Uniform Law Commission, has many benefits for companies.
For starters, you’ll have clarity on what it means to “sign” and “send” a record. You’ll also have answers to recurrent questions, such as whether you must garnish the earnings of independent contractors.
Short answer: Yes.
As for the scope of the law, it covers payments employees owe to creditors – not child support orders and similar ordered deductions.
How many days do you have?
Best of all, the law clearly lays out the steps you must take when you receive a garnishment.
For example, you’ll have 21 days to send the following information:
- a statement that the debtor is an employee of your company
- pay frequency and date of the next payday
- the appropriate person’s name and contact information – whether yours or someone else’s – and
- the number of other deductions and the priority of each deduction, if applicable.
You’ll begin deducting for the garnishment on the first payday that occurs at least 30 days after notifying the individual of the garnishment.
Then, you’ll have five business days to send the amount withheld to the creditor.
You may want to take time now to check out the Calculation Worksheet contained within the uniform law.
That’s because for every payday you garnish someone’s wages, your records will need to contain the information found in the worksheet.
Be prepared: At any time, an employee or creditor may request a completed Calculation Worksheet from you.
