Employees are not the only ones who may be negatively impacted by wage garnishment orders. As an employer, you must follow stringent rules that can differ significantly for each type of garnishment and from state to state. If you don’t have the technology or expertise to do this correctly, you can be held liable for as much as the employee’s entire judgment, plus attorney fees and related costs.

Wage garnishment challenges

Processing wage garnishments can be extremely complex. Some of the challenges include:

  • Complying with a myriad of federal, state and local requirements
  • Understanding and applying the rules for calculating each garnishment
  • Processing multiple garnishments for the same employee in the correct order
  • Making correct and timely withholdings for each type of garnishment
  • Avoiding administrative errors that pose the risk of a default judgment
  • Responding to the proper court or agency that issued the garnishment
  • Having trained employees with the skills to handle garnishment orders

How a compliance solution can help address these challenges

Technology that simplifies your wage garnishment processes and provides visibility to garnishing agencies can help you:

  • Receive garnishment orders automatically through integrations with agencies
  • Respond to interrogatories and notify employees in a timely, accurate manner
  • Validate the information in garnishment orders to reduce errors and data anomalies
  • View the status of orders in real-time so you can take applicable action, when warranted

Some providers, like ADP SmartCompliance®, also have a tenured team of support specialists who are responsible for building relationships with agencies, understanding compliance requirements, supporting agency projects/initiatives, answering questions, monitoring legislation and managing agency changes on your behalf.

Why should I purchase a compliance solution to manage wage garnishments?

There is no “one size fits all” when it comes to wage garnishment compliance. Each state has its own regulations, laws and guidelines that can further vary by garnishment type. Without a compliance solution, it's challenging to adhere to these rules and stay up to date with any changes that occur, especially if you operate in or have employees working in multiple locations. In addition, you can potentially be liable for the total amount required to be withheld from an employee's wages – plus fines, interest and attorney’s fees – if you process garnishments incorrectly.

Download our guidebook for more information on how ADP SmartCompliance provides the comprehensive garnishment order processing and disbursement support you need to reduce your administrative burden, improve compliance and mitigate the risk of costly liability.