Employment: Can An Employer Fire An Employee Whose Earnings Are Subject To Garnishment? Can You Charge The Employee?
In our February and March 2009 editions of the Employer’s Legal Resource®, we talked about what you should do when you receive a garnishment summons. We did not address your frustrations with having to deal with these issues. While we clearly aren’t equipped to provide psychological advice on how to get through the myriad of complications you face each day, we can give some guidance on what the law allows (and does not allow) you to do with those employees who seem to habitually be subject to garnishments.
As you may recall from the earlier articles, there are different types of garnishments. Not surprisingly, there are different laws governing actions which may be taken against an employee whose pay is subject to a garnishment. We will address each of them.
Federal Garnishments. If you have an employee who receives a federal garnishment (issued out of a federal court), you may not discharge that employee because his earnings are subject to garnishment “for any one indebtedness.” 15 U.S.C. § 1674(a). Of course, this leaves open the question of whether you can discharge an employee whose pay is subject to garnishments for more than one debt.
Oklahoma Garnishments. There is a more flexible law for garnishments issued from a state court in Oklahoma (excluding orders related to child support). The law states an employer may not discharge an employee whose income is subject to garnishment to satisfy “a consumer credit sale, consumer lease, or consumer loan, unless the employer shall be served with garnishment or like process issued to collect one or more judgments against the employee on more than two occasions within one year.” Okla. Stat. tit. 14A, § 5-106. So, if your employee receives two such garnishments per year, he remains protected from discharge for that reason. If he receives three state-based garnishments relating to debts from consumer credit sales, consumer leases, and/or consumer loans, it appears an employer is not prohibited from discharging the employee. Regarding the administrative burden, you may deduct $10.00 from the funds of the employee in your possession (e.g., wages owed) as reimbursement for the costs incurred in answering the garnishment. Okla. Stat. tit. 14A, § 1190(A).
Child Support Garnishments or Income Assignments. For obvious policy reasons (getting children the support they require), this is the most restrictive. If your employee’s income is subject to garnishment or income assignment related to an order to pay child support, you have no ability to discipline or discharge that employee. In fact, the law states that the payor (the employer) “may not discipline, suspend, discharge, or refuse to promote an obligor (the employee) because of an income assignment” to provide for child support. Okla. Stat. tit. 12, § 1171.3(B)(15).
As a small recognition of the administrative burden, the law does permit an employer to deduct up to $5.00 per pay period, not to exceed $10.00 per month, for each month in which the employer is administering an income assignment related to child support. Okla. Stat. tit. 12, § 1171.3(B)(12).
Practical Guidance. Be cautious when considering any employment action based upon garnishments or income assignments. Undoubtedly, it is an administrative burden to comply with these, but it will seem simple in comparison to a wrongful discharge lawsuit. Also, because of the various laws which apply, you should consult competent legal counsel before making any employment decision based upon garnishments or income assignments. A quick review by legal counsel of all of the applicable garnishments, income assignments, and applicable laws may save you money and headaches in the long run.
By Kristen L. Brightmire, email@example.com