What is garnishment?

Garnishment is a legal order requiring an employer to withhold a portion of an employee's wages and remit it to a creditor, court, or government agency for debts such as child support, tax liens, or judgments. For professional service firms, garnishments create mandatory payroll obligations with specific compliance requirements.

Key characteristics

• The court ordered wage withholding

• Employer must comply

• Various types with different rules

• Limits on amounts withheld

• Priority rules when multiple

• Penalties for non-compliance

Why it matters for professional service firms

Garnishments are legal obligations, not optional deductions. Failing to withhold properly exposes the employer to liability for the amounts that should have been withheld. Professional service firms receiving garnishment orders must implement them correctly and comply with all requirements.

Real-world example

Patricia received a garnishment order for the employee's child support: $850 per month. Payroll obligation: calculate withholding per order, ensure compliance with maximum withholding limits (50% to 65% of disposable income, depending on circumstances), and remit to the state disbursement unit by the deadline. Proper compliance protects a firm from liability while meeting legal requirements.