What Employers Need to Know About the Garnishment Law Ruling

November 30, 2015 | Charles Bowen

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There has been a great deal of confusion and uncertainty among employers throughout the state when it comes to wage garnishments since September 8, when U.S. District Court Judge Marvin Shoob declared Georgia’s garnishment statute unconstitutional. As an employer, you may be wondering if this should change how you currently respond to wage garnishment orders. The short answer is no, and here’s why.

Georgia Law and Garnishment Orders

Georgia law allows for bank accounts, wages or other funds to be garnished when a party has sued and won a judgment from a debtor in order to collect. Under the law, which treats the garnishment of wages and financial accounts differently, exempts certain sources of funds, like worker’s compensation, and sets percentage limits on the wages that can be taken. Typically, financial institutions have safeguards in place to ensure that exempted funds are not taken.

A Landmark Decision

The decision from Judge Shoob arose from a claim where the debtor sued the clerk of the State Court of Gwinnett County alleging that the state’s garnishment statutes are unconstitutional after his account was frozen and his worker’s compensation was paid to the court. Judge Shoob found that the statute does not give debtors notice of their entitlement to exemptions, nor does it require the debtors to be notified of how to claim an exemption or provide a procedure to determine exemption claims. He went on to prohibit the State County Clerk of Gwinnett County from issuing summons of garnishment that are inconsistent with the ruling in his order.

The decision sent repercussions across the state as the Chatham County Magistrate Court issued a standing order to stay garnishment cases on September 15th and some court clerks ceased issuing all summons of garnishment. They also began returning checks received answering garnishment orders to employers and financial institutions. Subsequently, the State Court Clerk of Gwinnett County asked the judge to provide clarification on his order.

Further Clarification on the Order

On October 5th, Judge Shoob explained that his earlier order did not, in fact, apply to wage garnishments, which are typically directed towards employers, but rather was limited to financial institutions that hold a debtor’s property under a deposit agreement or account.

Since Judge Shoob issued his clarification, many of the clerk’s offices across the state have resumed issuing summons for wage garnishment and are once again accepting wage garnishment funds. Therefore, even if employers have previously seen garnishment payments returned to them, they should now resume sending those payments to the courts and comply with any new summons they receive.

It is only in relation to garnishments ordered against accounts held in financial institutions that the constitutionality of Georgia’s statute remain in question. The matter will most likely be decided through appeals to judge Shoob’s order or via the Georgia General Assembly.

 

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Topics: Georgia Employment Law