Total Articles: 10
Ogletree Deakins • April 15, 2018
Most employers receive a garnishment from time to time, and some employers receive a lot of them. It is the employer’s legal obligation to administer garnishments exactly, and liability arises for the employer for over-deducting or for the judgment creditor in the case of under-deducting.
Ogletree Deakins • March 09, 2017
A frequent bone of contention for employees/debtors has to do with the implementation of out-of-state garnishments. The employee often threatens to sue the employer claiming that an out-of-state garnishment is not valid and/or that the exemption rules of the state where the employee works prohibit creditor wage garnishments. These arguments most often arise from employees working in Texas, North Carolina, South Carolina, and Pennsylvania. However, no matter where an employee works or resides, these arguments are flat wrong. In fact, if not exceedingly careful, an employer may end up liable for the debtor’s (even when this person is not even an employee) full unpaid debt for mishandling such a garnishment.
The Uniform Law Commission has released a draft Uniform Wage Garnishment Act (UWGA) which, if enacted by state legislatures, would streamline and ease employer administration of creditor garnishments by standardizing many elements that now vary by state law.
Ogletree Deakins • July 17, 2016
What employer would not like to reduce its legal risks and administrative costs? The Uniform Law Commission (ULC) presented employers with just that opportunity when on July 13, 2016 it finished three years of studying and drafting work and gave approval to the Uniform Wage Garnishment Act (UWGA). The ULC is a 125-year-old organization comprised of commissioners appointed by the 50 states (plus Puerto Rico and the Virgin Islands) that drafts laws for the states to consider and adopt where uniformity would improve commerce between states. After the ULC approves a uniform law, such as the UWGA, the commissioners of each state will present the statute for consideration to their state legislature.
Ogletree Deakins • September 16, 2014
Today, much-needed attention is being paid to wage garnishments. National Public Radio (NPR) released a story concerning the increasing use of wage garnishments to collect debts. The NPR piece relies on a report also released today by payroll company ADP. The report provides data, which had previously never been made publicly available, concerning wage garnishments. The information has not been available until now because states do not comprehensively track the use of wage garnishments and there is no comprehensive federal scheme for tracking garnishments either.
Ogletree Deakins • February 14, 2014
In part one of this two-part series on garnishments, I discussed the consequences employers face if they mishandle garnishment orders. In part two, I address one of the hurdles that employers face when trying to comply with garnishment orders, namely, the variation in garnishment laws from state to state.
Brody and Associates, LLC • January 31, 2014
Local ordinances prohibiting “wage theft” are gaining popularity. Cities are responding to activism around this issue by creating their own enforcement mechanisms beyond state and federal measures. “Wage theft” generally refers to any underpayment of wages by an employer, whether intentional or inadvertent, such as failing to pay overtime, making unlawful deductions from pay, or not properly sharing tips designated for employees. Houston and New Brunswick, New Jersey are among the most recent cities to enact such ordinances. New York City, Seattle, and Chicago enacted similar ordinances in recent years.
Ogletree Deakins • January 13, 2014
In my last blog post I mentioned five tips for administering creditor wage garnishments. This post will focus on the first tip.
Ogletree Deakins • November 04, 2013
Many employers aren’t aware that a failure to properly administer a garnishment of an employee’s wages can result in employer liability for a significant amount of money. In most states, an employer that makes even the slightest mistake when administering a garnishment (such as being late on a required disclosure) can become liable to the creditor for the full amount of the judgment that the creditor had obtained against the employee. Many of these judgments are for only a few hundred dollars, and others are for a few thousand—but some rise up to the hundreds of thousands of dollars. In one case, an employer that was 10 days late on its answer was found in default and ordered to pay a whopping $596,000 judgment against the employee.
Ogletree Deakins • October 14, 2011
Administration of wage garnishments, once a quiet and little-known back office function, like it or not, has stepped into the not so glamorous limelight. This has been caused by the convergence of several factors.