NFIB Backed Wage Garnishment Reforms Passed

Date: April 13, 2015

Related Content: NFIB in My State State 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 immediate effect.

Related Content: NFIB in My State | State | Michigan

Subscribe For Free News And Tips

Enter your email to get FREE small business insights. Learn more

Get to know NFIB

NFIB is America's leading small business association, promoting and protecting the right of our members to own, operate, and grow their business

Find out more about
NFIB Membership

Or call us today

1-800-634-2669

News

State Issues


Choose Your State

Foundations

YEF Foundation Research Center Legal Foundation

Member Benefits