The Maryland attorneys at SMLH explain what business owners need to know about wage garnishment laws in Maryland.
Garnishing. When it’s parsley, it’s nice. When it’s money, not so much. Business owners that receive a writ of garnishment on an employee’s wages can’t just pick that garnishment off their plates.
Here is what business owners need to know about wage garnishment laws in Maryland.
A wage garnishment is sometimes called a wage attachment. When someone owes a judgment, wage garnishing is a way for creditors to secure payment. But, wage garnishments can be a lot of paperwork for Maryland business owners.
A wage is an order from a court that requires business owners to withhold money from an employee’s paycheck in order to pay back an employee’s debt. The business owner is required to send this money directly to the employee s creditor. So even though the money is coming out of the employee’s pay, the paperwork and hassle is at the employer’s expense.
When an employer is served a wage garnishment, it is imperative that they respond to the garnishment in a timely fashion. A form is provided to the employer which allows the employer to indicate whether the employee is still employed by the company, as well as their rate of pay. Once that response is filed with the Court, a hearing is often held to determine whether a garnishment is permitted and, if so, in what amount. It is only after that garnishment order is entered that the employer is required to withhold monies from the employee’s paycheck. Employers who do not respond to the garnishment in a timely fashion run the very real risk of having the underlying employee’s judgment entered against the employer. If this occurs, the judgment creditor is free to collect their judgment in full against the employer regardless of the ability of the employee to pay.
Federal law places limits on wage garnishment amounts. In some Maryland counties, garnishment limits are the same as federal wage garnishment limits. In other counties, the rules are more restrictive.
Different wage garnishment laws apply to different types of debt. But, the good news for business owners is that wage garnishing typically only occurs when a creditor has received a court judgment against the person. Business owners won’t have to garnish wages on their employee’s late credit card payments or doctor’s bills.
Some types of debt can be garnished without a court judgment. For example, wage garnishments can be ordered without a court judgment if the debtor has unpaid income taxes, has defaulted on their student loan or is late on child support payments.
Wage garnishments can be a hassle, and some employers might be tempted to simply terminate the employee because they do not want to comply with a wage garnishment order. According to federal law, employers cannot discharge employees if they have one wage garnishment. However, if an employee has more than one garnishment, federal law will not protect them. Maryland law states that employers cannot fire an employee with a single wage garnishment in one calendar year.
For more information about wage attachments in Maryland and the procedures that employers must follow, please contact Kevin Mahoney or Laura Bechtel at Snee, Mahoney, Lutche & Helmlinger, P.A.