Governor Snyder recently signed Public Acts 14 & 15 of 2015 into law, amending Michigan’s wage garnishment statutes MCL 600.4012 and 408.477. The new laws will become effective later this year.
The new laws change the duration of a garnishment order. Currently, a wage garnishment order must be renewed after 182 days or it will expire. When the new laws take effect, a wage garnishment order will remain in effect until the creditor has been paid in full. This will eliminate the need for creditors to renew the wage garnishment order every six months.
The new laws also dramatically reduce employers’ administrative burdens and financial risk while increasing the funds paid to employers that must comply with garnishments. For example, the fee that creditors must pay to employers for administrative costs incurred in complying with a wage garnishment order will increase from $6 to $35. In addition, before an employer can be liable for failing to comply with a garnishment order, the creditor will have to follow a multi-step process that gives the employer multiple warnings and opportunities to achieve compliance.
Finally, if an employer had to pay any amount of the employee’s debt, the employer can deduct the employee’s wages without written consent under the new rules, as long as the employee had written notice of the deduction at least one pay period in advance, no more than 15 percent of the gross wages per pay period is taken, and the employee’s gross wages don’t go below the state or federal minimum wage amount.
