When a client, customer or patient neglects to pay you for services your Ohio business rendered, you may try sending reminders or making phone calls to the nonpaying party before taking further action. Sometimes, you may have no choice but to take additional measures if a client or patient bill remains unpaid, and one potential method of recovering what someone owes you involves garnishing that individual’s wages.
According to NerdWallet, wage garnishment is relatively common across the United States. Estimates suggest that between about 7% and 10.2% of American workers had their wages garnished in 2016. Consumer debts are among the leading reasons U.S. employees have their wages garnished, with wage garnishment often serving as an effective means for businesses looking to recover debts owed to them.
How wage garnishment works
Wage garnishment occurs after you successfully sue someone in court for failing to pay you. The court then notifies the employer of the party that owes you, and that employer then must withhold a certain portion of that worker’s paycheck until you receive what he or she owes you.
How much of their wages workers lose to garnishment
When it comes to consumer debts, such as credit card or medical bills, an employer must withhold the lower amount of either 25% of a worker’s wages or the amount by which that worker’s weekly income exceeds 30 times the current minimum wage. The employer must do so until the employee has paid back the amount determined by the court order.
Employers who fail to follow wage garnishment orders may face legal sanctions.