Authored By: Patti Callaway

The Problem Employers Face

As an employer, you want to support your team and stay compliant with the law. But when a wage garnishment order lands on your desk—whether for child support, unpaid taxes, or student loans—it can feel overwhelming.

The truth is, even a small mistake in calculating or processing a garnishment can expose your business to fines, lawsuits, or even liability for the employee’s debt. It’s more than paperwork—it’s a legal obligation. And mishandling it could leave you responsible for someone else’s financial problems.

Why This Matters

Ignoring a garnishment order, miscalculating the withholding amount, or sending payments late can put your business at risk of:

• Costly penalties and legal fees
• Being held liable for the employee’s debt
• Losing employee trust and damaging your reputation
• Drawing unwanted attention from agencies and auditors

 
In short: wage garnishment compliance isn’t optional. You either get it right, or you pay the price.

The Employer’s Role in Compliance

When you receive a garnishment order, here’s what the law expects from you:

• Respond quickly. Most orders will have a deadline date for interrogatories to be completed, and delays can trigger penalties.
• Calculate accurately. Various types of garnishments withhold at different rates, so review the order in detail.
• Remit funds on time. Payments must go to the right agency without delay.
• Keep thorough records. Documentation is your proof of compliance.
• Don’t stop without authorization. Only cease deductions when officially instructed.
• Protect your employee. Federal law prohibits terminating someone over a single garnishment.

 
These steps may sound straightforward, but in practice, even experienced payroll teams can trip up on the details.

The Path to Avoiding Risk

Here’s the good news: staying compliant doesn’t have to be stressful. Employers who put the right systems in place avoid costly mistakes and the headaches that come with them. Best practices include:

• Using payroll software to automate calculations
• Staying current on federal and state rules (they often differ)
• Training payroll staff on garnishment procedures
• Seeking expert guidance for more complex cases

 

By following these practices, you help protect your business, reduce legal risk, and support your employees with confidence.

How KPM Payroll Can Help

At KPM CPAs & Advisors (KPM), we understand that garnishment compliance can feel like a minefield. Our payroll advisors have helped businesses of all sizes process garnishments accurately, stay up-to-date with changing laws, and remove the stress of managing it alone.

Here’s how we can help guide you:

• We simplify payroll so garnishments are calculated correctly, every time.
• We monitor compliance rules so you don’t have to.
• We help protect your business from unnecessary penalties and liability.
• If you do your own payroll, we can review garnishment setup.

 

Benefits You Can Expect From Outsourcing Payroll

When you work with a dedicated payroll team, you can:

• Stop worrying about compliance errors and costly garnishment mistakes
• Safeguard your company’s finances and reputation from unnecessary risk
• Gain back valuable time to focus on growing your business and serving your employees and clients

 

Take the Next Step

Wage garnishments don’t have to overwhelm your payroll process. With the right systems and guidance in place, your business can stay compliant, protect your team, and reduce unnecessary risk.

If you’d like to explore what that could look like for your organization, the payroll professionals at KPM are here as a resource. Contact us to learn more.