Garnishing information: Employers must follow procedures
Despite what news sources and government numbers might indicate, daily life says economic times remain tough. And with tough times come an increasing number of wage garnishments.
Over the last year or so there have been dramatic increases in the numbers of garnishments that employers receive as well as circumstances leading employers to seek their own garnishments of former employee’s wages. So what should business owners or managers do if they find themselves in either of these circumstances?
If you’re seeking a garnishment, you must first obtain a monetary judgment against the individual. That means employers have to file and win a lawsuit. Then, courts issue a garnishment order pursuant to the judgment. After an employer receives an entry of judgment in a case, it can then ask the clerk of the court to issue a writ of continuing garnishment.
Colorado recognizes three distinct types of garnishments: a writ of continuing garnishment, which garnishes an individual’s earnings as long as those earnings are not exempt under certain laws; garnishments to collect child support or maintenance; and garnishments to collect money owed due to an individual’s participation in fraudulently obtaining public assistance benefits or in retaining public assistance overpayments. Employers and other creditors may only obtain general writs of continuing garnishment.
Colorado permits judgment creditors — any individual or organization that has obtained a judgment — to garnish wages of either employees or independent contractors. But the law requires the creditor to serve a copy of the writ of continuing garnishment on both the individual and on the garnishee — his or her employer or other organization that provides compensation to the individual. Once an employer serves a writ of continuing garnishment on a garnishee, the garnishee must respond within certain time limits regarding the amount of earnings that it may withhold under the law.
A writ of continuing garnishment is valid for 180 days. If the amount of your judgment is not satisfied within 180 days, you may ask the clerk of the court for another writ of continuing garnishment and continue doing so until the judgment amount is paid in full. It’s important to remember, though, you can’t serve multiple writs of continuing garnishment regarding the same individual upon the same garnishee — such as the individual’s employer — during the 180-day period. If a writ of continuing garnishment is satisfied in full during its 180-day life, the writ automatically expires.
If you receive a writ of garnishment for an employee, be sure to comply with all directions on the writ documents. Second, check to see whether or not you previously received any other writs of garnishment for this employee. If you have, investigate what type of writs you previously received. A writ of garnishment for child support or maintenance holds priority over garnishments for public benefit fraud, which itself holds priority over garnishments pursuant to judgments.
If your employee’s earnings are garnished pursuant to a writ of continuing garnishment and you later receive a writ of garnishment for child support, you must immediately stop withholding earnings for the continuing garnishment and start withholding wages for the child support garnishment. In this scenario, you must also let the parties involved in the writ of continuing garnishment know why you stopped withholding earnings and that you will resume withholding earnings as soon as the garnishment for child support ends.
If you have any questions about what to do to obtain a garnishment or to withhold wages pursuant to a garnishment, be sure to consult with an attorney.