Here Is How Wage Garnishment Can Affect An Employer’s Life
- February 5, 2020
- Posted by: asal
- Category: Tax Resolution
An IRS wage garnishment can crush anyone’s financial situation. Through this, the employers have to withhold a part of your income and send it to the IRS. IRS doesn’t even take you to court. They will just issue a warning in advance in the form of a notice. Wage garnishment by a federal agency is highly unexpected. But, it is not possible that you didn’t see it coming. But, IRS wage garnishment doesn’t affect only the taxpayer. It also affects the employer who has to send your money to the IRS.
IRS wage garnishment sounds pretty serious, and it is. The IRS uses this only as a last resort to get its money back from the taxpayer. And even if you didn’t have to deal with IRS wage garnishment as an employer, the chances are that you will have to in the future. Wage garnishment will have an impact on your employees.
Also, as an employer, you have to collect the amount that will be taken from the paycheck of the employer. This is because the garnishments are calculated during the payroll process. Now, you are legally required to go through the wage garnishment imposed on your employees. However, there are some ways through which you can help your employees through this tough time. As an employer, you can get them a financial wellness expert for providing budgeting solutions and counsel. By this, you will be minimizing the negative impact of the garnishment on you and your employee. Also, it will help get your employees out of debt.
Impact Of Wage Garnishment On The Employers
Wage garnishment acts as a demotivating force. The employee is subjected to more financial stress that affects their productivity, and ultimately, your business. Here are the 3 ways in which the IRS wage garnishment can affect your life.
1.Your employee’s morale and productivity will be down
There is no doubt regarding the effect garnishment will have on the employees. This impact is beyond their income. This will be affecting every aspect of their life. The whole process of wage garnishment for employees is very humiliating. Also, their employer now knows about their financial struggles, which can be embarrassing for them. On top of this, their financial situation was so bad that the IRS had to go for this. Now, they are working for the IRS, and not just themselves and their future.
As an employer, you are responsible for wage garnishment. You will be holding a portion of their income and sending it to the IRS. But it is not a straightforward process. You will have to deal with the complicated calculations. Also, your employees will be humiliated by having you involved in their private, financial struggles. Anxiety and stress are an extension of the garnishment.
Now, your employee will be dealing with anxiety. This will be reflected through a lack of motivation and decreased productivity. You can help them through this. You can help them reduce the risk of future garnishments by offering financial wellness counseling and training. Also, you can help them in managing debt by providing tax education.
2.Effect on your business’ finances and efficiency
Wage garnishment can expose you to legal and financial risks. This includes the following:
- Failing to file timely
- Filing a defective response
- Incorrectly garnishing an employee’s income
- Failing to send payments through specific requirements
- Making any other such missteps with the IRS wage garnishment.
When you mishandle a garnishment, you might get a judgment against you where you end up paying the entire debt of the employee. You might also have to pay other costs like penalties that you didn’t budget for or even anticipate.
If the employee has garnishments for child support, there are some laws that restrict travel. For example, the 1997 Social Security Act had some amendments. If the non-custodial parent owes more than $2,500 in child support, it can lead to denial of US passports. Some states can even revoke or deny your drivers’ license for child support obligations.
If your business involves traveling internationally or driving, these laws can affect the ability of the employers to do their job effectively. This will have an impact on your business’ efficiency.
3. Creditor Garnishment
This is another area of focus that could have an impact on employers. Currently, the Uniform Law Commission is working with the American Payroll Association. They want to establish a standard process for creditor garnishments. Right now, state laws differ in their requirements for the garnishment, from start to the end of the garnishment. As an employer with business in different states, you must abide by the different state’s legal requirements. This can lead to confusion, processing errors, noncompliance, and inefficiency.
What Can You Do?
For managing these challenges, you need to get familiar with the laws of wage garnishments. You must also have the guidelines provided by different agencies like the IRS or the Federal Office of Child Support Enforcement. As an employer, you have to work on developing timely and reliable procedures for garnishment.
You need to stay on top of the garnishment process to avoid any legal and financial complications. For this, it is best to take the help of professionals. Platinum Tax Defenders is a tax resolution service that can help you as well as your employees with the IRS wage garnishment. Our tax relief experts will ensure that the wage garnishment doesn’t put you at risk. Also, we can work on helping your employees get an IRS wage garnishment release. All you have to do is book an appointment.