Thursday, June 24, 2010

Are Garnishment Limits on the Rise?

As I was reading my daily news updates and preparing them for distribution to my newsletter subscribers I found a very interesting item on an area that doesn’t get changed very often. Florida is amending its wage garnishment provisions to increase the amount of wages exempt from creditor garnishments. This applies to the head of household or head of family category. They are increasing it from $500 to $750 a week. Anything under that limit cannot be attached or garnished. It allows for the garnishment to take place if the person agreed to it in writing. But it provides the form to be used for the agreement to waive the exempt to garnishment. It is very rare that these types of amounts are changed. It usually only happens when the minimum wage is increased or they haven’t been changed for many years.

Another reason I find this interesting is the wave of questions I have been getting lately concerning payday loans or personal loans at payday stores. When a person gets such a loan, it appears, they sign a letter that states they agree to allow the amount to be deducted from their wages if they don’t repay the loan. So payroll professionals are unsure sometimes whether to honor the agreement. Most that I know do not as they are a voluntary wage assignment and employers are not legally bound to honor them in most cases. But I was wondering if this increase in the amount subject to garnishment in Florida and the fact that they now have a special form to use and the growth of payday loans is somehow related.

So will we be seeing a rise in garnishment limits in the future in large numbers or is this a one-off case for just Florida? We will have to wait and see.

In the meantime, have you been getting any requests from payday loan type establishments wanting you to honor withholding agreements? Let us know how you handled it.

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