A wage garnishment is a legal document, so if you receive one against an employee, you must follow its instructions. You cannot stop the garnishment withholding unless the employee pays off the debt or you receive an order from the issuing agency to cease the withholding.
A garnishment must come from the court such as for child support or alimony withholding, or a statutory institution such as the Internal Revenue Service or the U.S. Department of Education to be valid. If the garnishment was initiated by a creditor, the latter must obtain a judgment and an order to garnish from the court. The garnishment order is sent to you via the marshal or sheriff. The paperwork includes the contact information for answers to any questions about the garnishment.
Advertisement Article continues below this adIf an employee asks you to terminate a garnishment because she made a payment arrangement with the creditor, do not stop the withholding unless you receive written authorization from the issuing agency. You may help speed up the process by contacting the agency to verify the matter and have them fax you the paperwork.
If the debt has been fulfilled, stop the garnishment. When you first received the garnishment, you likely entered the deduction data into your payroll system. This includes the amount to be deducted per pay period, the total balance owed, and any administrative fees you're allowed to deduct under state law. Each time you run payroll, the withholding occurs and the employee's balance is reduced. After the final deduction, no more withholding should be taken from the employee's paychecks. Simply submit the last payment to the respective third party accompanied by a statement that it is the final payment.
Advertisement Article continues below this adIf, for some reason, the debt is not fully paid, but the issuing agency wants you to stop the garnishment, it sends you a release notification. This type of notification is used for transactions such as garnishments issued in error or employees who filed bankruptcy. Also, if the employee entered into a payment arrangement with the creditor, you are sent a release form. The issuing agency generally refunds the employee for amounts collected in error.
When a judgment is issued against an employee, the court or the creditor or its attorney may send you an answer. Include in your reply information regarding whether the employee still works for you, and, if so, details of her wages. If the employee is no longer employed by you, state this in your answer. If she was terminated while subjected to the garnishment, notify the issuing agency in writing. In some cases, you're required to include the terminated employee's new employer, if known.