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Can I charge a fee to process garnishments in Michigan?

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  • Can I charge a fee to process garnishments in Michigan?

    Can I charge a fee for garnishments or FOC's in Michigan. I use a payroll company and it is costing me to cut over 40 checks each week.

  • #2
    A short answer is that you can do whatever the court order says you can do.

    A somewhat longer answer is that if you think that the court order was not correctly drafted according to federal or state law (this is mostly a state law issue), then you can hire a lawyer, go to court and try to get the court order rewritten to whatever you think the law should support. If however you choose to violate the court order and just take whatever money you want, a smart employee will contact the court and tell the court that you are in violation of the court order. Then you still get to hire an attorney.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Many court orders I get specifically state that we can charge a fee. I really don't know the details, since we won't do that. Either the fee is coming out of the taxpayer, the person owed or the employee. The costs of processing the garnishment is not all that great (we do payroll in-house and pay the states weekly for garnishments collected) and I really, really like my employees to keep as much money as they can.
      Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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      • #4
        If one wants to get very technical, there is a federal law called CCPA (Consumer Credit Protection Act?) that covers certain types of withholding orders (credit garnishments, child support, federal insured student loans). This federal law sets certain maximum limits such as the 25% creditor garnishment limit. However CCPA allows states to set rules more favorable to the employee. This is why TX for example as a 0% limit for creditor garnishments for example. CCPA also has no affect on bankruptcy or tax levies (different laws).

        Courts do whatever courts do. I have seen court orders that I know darn well were not legal on it's face. However when I see a court order, I am normally the employer and the employer is not normally a legally interested party in these things. If the order is messed up, it is generally the directly affected parties problem to get things straightened out.

        Like Scott I have never bothered with the employer fees and I have done thousands of these things over the years. However some employers do, and if you want, read the order and do whatever the order says. If you (the employer) want to try to get the court to change the order to allow whatever deduction you think that the law allows, go ahead, but I personnally have always felt that it was never in my (the employer's) advantage to go get some judge stirred up.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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