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How Long Must an Employer Keep Creditor Garnishment Records?

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Creditor garnishments are deductions from wages resulting from a court order that typically result from losing a lawsuit for breach of contract, or failure to pay amounts owed for a credit card, loan, taxes or child support. Garnishing an employee's wages begins with a court order, the documentation required for withholding or deducting money from an employee's paycheck.

Employer Process

Employers that receive court orders must provide notification to the employee that her wages are being garnished, pursuant to a court order. The payroll department then processes the deduction, collects the money required by the court order and remits it to the creditor. Recordkeeping provisions for garnishments fall under the Fair Labor Standards Act for maintaining employee wage information.

Fair Labor Standards Act

The federal Fair Labor Standards Act mandates employers' recordkeeping obligations. Although extensive FLSA recordkeeping provisions apply to nonexempt employees, many employers follow the same rules for exempt employees. Records that employers are required to maintain for at least three years include personal information about the employee, including Social Security number, sex, position and title, wages earned, pay rate and overtime earnings. In addition, employers must maintain records of all deductions made from employees' wages. Garnishments fall under this category.

References

About the Author

Ruth Mayhew has been writing since the mid-1980s, and she has been an HR subject matter expert since 1995. Her work appears in "The Multi-Generational Workforce in the Health Care Industry," and she has been cited in numerous publications, including journals and textbooks that focus on human resources management practices. She holds a Master of Arts in sociology from the University of Missouri-Kansas City. Ruth resides in the nation's capital, Washington, D.C.