If you are an employer, you may be required to withhold amounts from your employee's wages to pay their creditors. This is called wage garnishment. As an employer, you must follow the procedures set forth by state and federal law.
When withholding money from an employee's paycheck for garnishment, you must deduct the amount specified in the court order or notice from their disposable earnings. Disposable earnings are defined as the amount of an employee's wages left after taxes and other mandatory deductions have been withheld. You cannot withhold more than 25% of an employee's disposable earnings or any amount that would leave them with less than 30 times the federal minimum hourly wage, whichever is less.
You should keep a record of all money withheld for garnishments in a separate account so that you can easily remit the funds to the creditor. You will also need to send a copy of each payroll check stub showing how much was deducted for garnishments to the creditor along with your payment.
While wage garnishments can be a hassle, it is important to stay compliant with state and federal law. If you have any questions about how to properly withhold money from an employee's paycheck for garnishment, contact an experienced employment attorney for guidance