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Handling wage garnishments of your employees’ paychecks – including communication – is a very sensitive issue.

The Great Recession might be over but the economy remains tepid as many Americans struggle. That includes bad debts, child support payments and student loans. For instance, 2016 published reports indicate that 40 percent of student loans are in default.

Money issues from involuntary wage garnishments are very embarrassing to employees. Such situations pose a threat to your employee relationships and morale.

Meantime, you must process wage garnishments with lawful diligence.

To handle garnishments with skill, here are four tips:

1. Notify your employee in writing

Companies aren’t required to notify workers of wage garnishments, but this is to show respect to your employee.

Remember the Golden Rule. Be empathetic and protect confidentiality.

Hopefully, it will alleviate the employee’s angst and embarrassment.

Your letter should inform your employee of three things – who obtained the garnishment, how much money will be withheld, and duration of the garnishments.

Even if the person has left your company, he or she should be notified. And the debt collector should be told.

2. Inform your HR and payroll departments

Notify your human resources and payroll departments. Many employees have a tendency to ignore the letter.

Next, you must begin to honor the garnishment and forward the funds to the debt collector. Often, it has to be over the employees’ objections.

3. Reassure your employee

Take steps to keep a good relationship with your employee. Let the person know he or she will stay employed.

It’s unlawful to terminate a worker over a single debt. But it’s permissible to part with a worker who faces a second consequent debt.

4. Notify the person of reimbursement costs

In some states it’s lawful for a company to get reimbursement from such workers for the extra time expended to process wage garnishments. But the employee should be notified.

Personally, in most situations, I wouldn’t recommend seeking reimbursement from an employee. It would only exacerbate the situation.

From the Coach’s Corner, here are additional management tips:

HR — Avoid the 10 Most Common Background Screening Gaffes — In human resources, all background checks are not equal. It’s important to avoid the 10 most-common background-screening errors.

HR Management: Think Like a Sales Pro to Recruit the Best Talent — One-size-fits-all approach to recruiting employees is not a strategy. You and your peers in human resources might be enamored with technology, but job candidates want more focus on the personal touch. That necessitates thinking like a sales professional.

Hiring for a Small Operation? Conduct Behavioral Interviews — In this economic environment, whether you run a small operation in a big company or you own a small business, you’re wearing many hats. So you need employees who can successfully wear multiple hats, too.

Risk Management in Hiring: Pre-Employment Screening Tips — Here are two questions about hiring: 1) what’s the biggest mistake companies make in hiring employees; and 2) what’s the biggest legal obstacle employers face in hiring? Here’s what to do about background screening.

Increase Profits by Hiring Talent with the Best Trait — Enthusiasm — You’ll increase your odds for profits with high-performing employees with the right culture — if you hire for the right personality trait – enthusiastic people. That’s right. Look for people who have the makeup to being committed and who will care for the welfare of your company. You’ll increase your chances for the strongest results.

How to avoid EEOC Discrimination Suits — Here are six tips for micro-companies and 13 strategies for larger organizations to avoid EEOC migraines.

“Fairness is such a valuable thing, that no money can buy it.”

– Alain-Rene Lesage


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.