NFIB Victories in Michigan!
NFIB supported legislation that will change the way wage garnishments are processed and end the “gotcha” penalties imposed on employers was signed into law by Governor Snyder on April 14, 2015.
Public Acts 14 and 15 of 2015 will provide much needed reform to Michigan’s process of garnishing an employee’s wages.
Most small businesses do not have an HR department or a person solely responsible for processing garnishment claims and, under the old law, it was easy for them to make honest mistakes and errors that exposed them to the risk of being held liable for the entire debt of an employee or former employee – plus court costs and attorney fees. The bills passed on Thursday will make changes to the current process that provide clarity and fairness to small employers while ensuring that properly executed garnishments will be fully enforceable.
In the past, an employer who failed to respond to a legal writ within 14 days could be held liable for the entire debt of an employee. The new legislation addresses this by providing additional notification and more opportunities for employers to respond and fix errors. The legislation would also raise the processing fee paid to employers from $6 to $35 and keep a garnishment in effect until the balance of the debt is paid rather than the current requirement of renewing it every 6 months and going through all the paperwork again.
The new changes to the law will not impact the current process for child support or tax-related orders.
The bi-partisan legislation will address many of the complaints employers have expressed regarding the garnishment process, while keeping intact the ability of businesses and individuals who are owed money to collect on bad debt.
The Governor signed the bills into law with PA 14 receiving immediate effect and PA 15 becoming effective in September 2015.
