Garnishment Reform Comes to Georgia Businesses

Effective immediately, businesses in Georgia can save themselves the expense of using legal counsel to file routine garnishment answers. The new law, signed by Governor Nathan Deal on February 7, 2012, allows businesses to appoint an “authorized officer or employee” to file such answers and declares that such filing “shall not constitute the practice of law.” This reverses the Georgia Supreme Court’s 2011 decision that held that filing garnishment answers by a non-attorney is the unlicensed practice of law.

Georgia’s garnishment law places unique responsibilities on employers. They must serve and file an answer to the summons of garnishment and, in the case of a continuing garnishment, must answer at 30-day intervals. In addition, an employer must withhold and remit a portion of the employee’s disposable earnings to the court. Failure to file and serve these answers at any point can result in a default judgment and the employer becoming liable for the employee’s debt. Federal and state law place a limit on the amount of earnings subject to garnishment, depending on the type of debt involved. Employees also are protected against discrimination under federal law for having their wages garnished for a single indebtedness.

Traditionally, Georgia employers used their own payroll or human resources staff to complete, serve, and file these answers, avoiding the expense of an attorney. In 2011, however, the Georgia Supreme Court, in In re: ULP Advisory Opinion No. 2010-1, adopted the view of an informal advisory opinion of the Georgia Bar Standing Committee on the Unlicensed Practice of Law. The Committee reasoned that a garnishment action is a legal proceeding and that businesses, unlike individuals, lack the constitutional right to represent themselves in legal proceedings. Therefore, the Committee found businesses were not exempt from the requirement of using a licensed attorney in garnishment proceedings.

“This is an important development for corporations in Georgia and will relieve them of the expense of unnecessarily involving an attorney in a common payroll procedure,” Jackson Lewis Partner Dion Kohler noted.

This is only a brief summary of the new law. Jackson Lewis attorneys are available to answer questions about this and other workplace developments.