The scenario: You’ve been served with an income execution by the Sheriff or City Marshall to withhold wages from your employee’s paycheck for a debt owed.
Other than more paperwork, what else could it mean for you and your business? Understanding your responsibility as an employer is essential if you want to avoid liability and paying a debt that wasn’t yours to pay.
Understanding the Law
An income execution served on you, the employer, requires you to withhold wages that would ordinarily be paid to an employee.
You aren’t required, nor should you investigate the validity of the underlying judgment. The law, as written, simply requires strict compliance. Your responsibility is to deduct and withhold the necessary amounts from your employee’s salary and pass it to the Sheriff or Marshall.
As background, you should know that the employer is served second in the process. By the time you are served with the income execution, your employee has already been served notice of the judgment and the involvement of the Sheriff or Marshall. Your employee will have been served an income execution and given the opportunity to pay in installments.
It is only if an employee — the judgment debtor — fails to remit the installment payments to the Sheriff or Marshall within a period of time, that the creditor can proceed to the second stage and serve you, the employer.
If the judgment debtor is employed by you and meets the minimum wage required for garnishment but specific exceptions are not met, you fail to remit the installment payments withheld from the employee’s salary and the creditor can come after you.
Your Risk as an Employer
It’s incumbent on the employer to make the deductions. If you don’t and don’t want to be held liable, you’ll need something from the Sheriff or Marshall to stay the income execution. “That’s because once the second stage of an income execution has been served, it becomes the employer’s liability,” said Martin Bienstock, City Marshal Badge #75.
And, if you are a sole proprietor, the creditor can come after you personally.
“In my experience, a major contributing factor to an employer failing to honor an income execution is when mail gets intercepted by the employee or the employees’ friends,” said Gregg Bienstock, City Marshal Badge #17.
Whatever the reason — intentional or not — if you fail to withhold the installments as required, the income execution doesn’t go away.
How Creditors Can Force Employer’s to Pay
If the judgment creditor fails to honor an income execution, the creditor can file against the New York employer for accrued installments and the monies that should have been withheld and paid over, per New York Civil Practice Law and Rules (CPLR) section 5231(f).
In order for a creditor to be successful, the creditor needs to show:
- That the employee was employed by the employer
- Based upon the employee’s earnings, the employer was required to deduct a specific amount (or installment)
- That the employer did not comply with the income execution
- That there is a total due for the collective installments and provide a specific figure.
If successful, the creditor can obtain a judgment against you for the “missed installments” and can collect monies from you that your employee owed.
Your responsibility as a New York employer is to honor the income execution you’ve been served. There are some exceptions that you might want discuss with collection counsel.
If you are served with an income execution and have questions, or wish to proceed with an income execution and enforce your rights to get paid, call FFGN. We have the experience that pays.