In late 2015, Michigan Governor Rick Snyder signed Public Act 14 into law. This Act made employer-friendly amendments to Michigan’s wage garnishment laws while streamlining the wage garnishment process. The amendments also decreased the default judgment risks arising when a garnishment is mishandled.
Some of the changes include:
- Requiring that a $35 fee (instead of a $6 fee) be paid to the garnishee (ie the employer);
- Changing the duration of the garnishment so that garnishment continues until the balance of a judgment identified in the verified statement supporting a garnishment is satisfied in full (instead of the garnishment ending after six months).
- Requiring that a garnishment be properly served or it is invalid.
- Previously the law allowed a garnishment to be served via store or plant-level delivery.
- Requiring the plaintiff (the one seeking to enforce the garnishment) to provide the garnishee and the employee whose wages are being garnished (the judgement debtor) with a balance statement every 6 months
- Requiring the plaintiff provide the employer/garnishee and employee judgment debtor with a release of garnishment within 21 days of full payment of the judgment (including all costs and interest).
- Requires a plaintiff to engage in a new multistep notification process prior to garnishing an employee’s wages
- Creates a new complete defense to employer/garnishee liability, which is intended to protect employers when the garnishment and/or notice of failure are not properly served or the employer owes the debtor no funds.
- Limits liability of garnishees to 56 days of proper withholding when the garnishee files a motion within 21 days after a default judgment.
- Allows employers to deduct from the employee’s wages without the necessity of obtaining voluntary written consent any amounts that the employer had to pay due to mishandling the garnishment
The new laws affect garnishments that were issued after September 30, 2015. It is recommended that all Michigan employers review their wage garnishment obligations under these new laws.