# Wage Garnishment Research Interview — SMB owner, Richmond, VA ## Background **Kevin:** Hey, really quickly, can you describe your business, how many employees you have, their employment type, and maybe like the average hours per week that they work? **Owner:** Yes. We do non-emergency medical transportation. And we take folks to their doctor's appointments and what have you around the city. We have 18 employees thus far. I would say nine of those are full time and the other nine are part time. Everyone works around 51 hours per week for the full time folks. And even the part time ones are nailing down about 30 hours a week. **Kevin:** And in terms of employment type, they're all 1099. Correct? **Owner:** They are all 1099 except two. **Kevin:** Okay. Thank you so much. I just wanna get a basis of your business and get that part out of the way. **Kevin:** Can you tell me about your position at the company and then who's in charge of the different roles and responsibilities as the business operations of the company? I'd love to know more. **Owner:** I pretty much run the company by myself. And all of the garnishment situations, HR situations, accidents, incidents, training, scheduling, dispatching, payroll, training, you name it, all falls under my hat. **Kevin:** And I know you occasionally call in help, but by and large, you're doing all of these by yourself day to day. Right? **Owner:** Correct. --- ## Part 1: Current Process **Kevin:** So today, we're gonna be talking about wage garnishments, which I know you have experience with. I am prepping a case study for a product interview at Justworks. The prompt is reduce the friction and wage garnishment processing from mailed court orders. I'll need to understand the real pain points from someone who actually deals with this. And in this case, it's you. So I'm gonna keep this conversational. Hey there, I'm prepping for an interview, and one of the topics is about wage garnishment processing. I know you've dealt with this. Can I ask you a few questions about what that's like on your end? First, we're gonna talk about the current process. Are you ready? **Owner:** I am ready. **Kevin:** Okay. First, I want you to walk me through what happens when you get a garnishment order, like literally step by step, be as specific as you can be. From the moment it shows up. And then after that, we'll dig into how it arrives -- like certified mail, regular mail, email, fax. How long does it typically take from when you receive it to when you start withholding? Who handles it at your company? Is it you, a bookkeeper, payroll provider, or a lawyer? And then finally, do you use a payroll service? If so, how do you get the garnishment info into the system? I'll start back with the first question. Walk me through what happens when you get a garnishment order. **Owner:** So in my line of work, I do have several employees. And every now and then, I do get a garnishment order. It usually arrives through a process server, which is an independent entity assigned by the court to deliver these. And then on a rare occasion, you will get one from a sheriff. They will deliver the summons as well. If you or me or there's not a human there to receive said summons, they will conspicuously tape it to your door. So at some point, you'll notice it and you'll get it. That is the first part of the process -- being embarrassed even to have a sheriff in front of your door or to have some stranger knock on your door to deliver one of these garnishments. Step two is you open the garnishment and you kinda read it. Usually, there is some sort of a lead time on the garnishment. I always look at the amount of the garnishment. If it's a small amount, you know, something under a thousand dollars -- especially in the $500 range -- I don't worry about it too much. I actually just dealt with one that was $817 last week. You have to read the garnishment thoroughly because they're gonna have a court date on it. Usually, the court date is anywhere from two to three months out, a month out on the short end. If the garnishment is child support related, usually, that one is immediate. So depending on the amount and whatnot, I as business owner have to determine how to deal with this. Like I said, if it's under a certain amount -- $500, $800 like the last one -- and they give me a nice long length of time, a month or two, before they have it, then I will usually call the employee aside. Talk to them about it, and see if there's something that we can do. Because as far as I'm concerned, once I get that garnishment, now it's my business. Because my name is on it, the business name is on it, and now I'm on the hook to deal with this prior to the court date. Now the way I deal with this also is I'm not a very happy camper because now the employee has brought their personal life into my business world and put me on the hook as business owner to deal with this situation. So if I'm gonna deal with it, you're gonna deal with it my way. And my nicest iteration, like my last one that was $800 and the court date was about two months out -- I will dock their pay. And I will get with them as to how you want me to handle this. And this is just a suggestion to them because at this point, now that I am involved, I am completely on the hook. I am just trying to give them the nicety of having them involved. So I will usually say, do you want me to take half now out of the next check and then half out of the following check? And usually, they will agree to that. If they agree to something else -- for example, maybe they don't have it, and I pay the entire amount before the court date, and I deduct money from their check even after the court date has passed -- I will do one of those things too. If it's a child support scenario, I will -- as that is a more serious thing in my opinion -- enact that one immediately. In all the cases, whether it's child support or not, now that the garnishment is in my pocket, I view it as this is a grown adult human being that cannot handle their own business and now I have to handle their business as a quote unquote parent. So I'm already unhappy, and so I'm gonna deal with it as quickly as possible because it will come back on me as an employer. --- **Kevin:** Digging into the current process a little bit more -- you said it always arrives by some sort of certified mail. Does it ever arrive by regular mail, email, or fax? And then follow-up question to that, do you ever have to communicate back in any way on status or anything like that? **Owner:** No. Because it never arrives by email or fax. A human being always delivers it to ensure that you receive it. **Kevin:** Answer the question of who handles it. Obviously, you're such a small business -- you handle it. **Owner:** I handle it. Yes. **Kevin:** And then a question. How do you manage this today? Because you said you use ADP. Correct? **Owner:** Correct. **Kevin:** Give me a little bit of deep detail about what you do when you're inside of ADP. **Owner:** ADP is relatively simple. It has fields for different things. It also has a field for deductions of any sort when you're processing their normal pay. So it gives you a field for, you know, loan payment, miscellaneous payment, advance -- any of those types of things. And I just enter that value into the field. And then each time payroll is processed, that amount is deducted from their check. **Kevin:** And a follow-up question to that -- do they give you an account that it's to be forwarded to with a specific account number or memo so that they know that they've received it? **Owner:** Usually, no. On the child support garnishments, that one is usually handled by the deduction in ADP. And then there is a separate website that I have to go to and sign up on, which is a state child support website, and I have to enter their information and Social number and other information there and essentially link that to my business bank account to pay them on the schedule that they want. For example, I have one person -- the child support wants x amount every two weeks. So let's say it's $200. So I entered $200 into the child support website, and then I have to pay child support every two weeks and that money comes out of my business account. On the other side of it, to recover that same $200, I deduct that money from the employee through ADP. So if he were getting a check for $1,500, he's now getting a check for $1,300. **Kevin:** Okay. That makes sense. And with this, that will close out the current process set of questions. --- ## Part 2: Pain Points **Kevin:** Now we're gonna go into pain points. Think about it beginning to end -- what the pain points are. They could be from receipt. We already talked about most of the receipt pain points. If you missed any, you can list them out quickly. I'm thinking about the process once you're starting to -- you mentioned some of the workflow you have to do in ADP and then in another system and things like that. So if there's anything that you can think of that's a current pain point, I'm gonna ask you some questions about this. Let me know when you are ready. **Owner:** I am ready. **Kevin:** Alright. I'm gonna run through the questions in total, and then I'll go back to the first question and we'll work through them. 1. What's the most annoying part of this whole thing? 2. Have you ever gotten one that was confusing -- like you weren't sure how much to withhold or which employee it was for? 3. Have you ever missed a deadline or made an error, and what happened? 4. How do you handle multiple garnishments for the same employee? Are there priority rules? Do you even know about what the priority would be? 5. What about when a garnishment ends? How do you know when to stop? --- **Kevin:** Back with question one, and we can tackle these one by one. What's the most annoying part of the whole process? **Owner:** The first pain point is in reception. To have that official and or sheriff arrive at your workplace with that garnishment in their hand. And to turn it over to you. As a business owner, you had enough to worry about on top of enough. And now they bring this to your table. Which is something that your people should have taken care of in their personal life and have not. Pain point two is it becomes a burden on the business. It's money that you have to direct elsewhere when you may not have the money on hand. It's also logistics as far as you might have to mail something to someone, or to sign up on any number of websites, facilitate payment that is required. All things that you did not have to do prior to receiving the garnishment. All things that should have been taken care of by the employee but were not for one reason or another. **Kevin:** Fair enough. I think we have enough on that first question. So we'll pivot to the next question. Have you ever gotten one of these that was confusing? For example, you weren't sure how much to withhold or which employee it was for. **Owner:** Excellent question. 50 to 60% of the garnishments are confusing. The child support ones are usually pretty cut and dry. They will have a specific amount that they want, so that's easy to figure out. A lot of the others will want a percentage of your take home pay. Or your disposable income. Which -- how am I supposed to know what part of the employee's pay they consider disposable? It's all arbitrary. And so to ease my mind, I will have to take time out of my busy schedule to calculate a repayment plan. Because remember, usually, they do have a court date. For example, if the court date is June 1, and the judgment is for $1,500, I have to figure out how to get $1,500 out of this person prior to the court date. That also means that I have to work that person whether I want to or not. To ensure that they are making money so that they can pay me back for what I have to put upfront. To satisfy their judgment. Because once that judgment is sent to me, and posted on my door by the sheriff, the company is involved, and now the company is on the hook. And has to go to court on June 1 if the judgment is not satisfied. --- **Kevin:** One more question, and then we'll finish the pain points either later tonight or tomorrow. This is a question that I just thought about that wasn't even on my list. What is the process when the garnishment is due and they either haven't worked enough or haven't earned enough? I think you've covered the shortfall before. I'd love to know -- you also said you either have to schedule them additional hours, and they may not be -- they may be a part time employee -- or having to employ them longer to hit the goals of the garnishment. And then also, have you ever had to cover a shortfall and come up with another agreement with the employee? **Owner:** Usually, no. I have not had to come up with a way to recover this shortfall, because I try to take as much of it as I can when the opportunity is there. But with the child support scenario -- one of your questions was how do you know when to stop? A lot of times the employee will have to go back for a court hearing or a rehearing or an adjustment or something of that nature at some point in time, where the money will be adjusted. Or if such and such is satisfied, the court will send an additional garnishment paper explaining that the garnishment has been satisfied. And at that point, I will no longer have to pay. If there is an adjustment of any sort, the paper will also say that. For example, if I have been taking $200 and the employee has gone to court, and a situation has changed, and now he owes more or less, they will send that officially in the mail. That I need to change my deduction from $200 to $250, or $200 to $150, or whatever the court has decided. Either way, I am still bound to follow that order until I can get an order that says I no longer have to withhold. --- **Kevin:** I should ask you one more question before we wrap. In the current process, you've received these letters. What do you do with them today? How do you file them? How do you keep them all straight? What is your current process to organize these requests that are coming through? **Owner:** Physical files. Nice old paper and paper clips, and those go into those manila folders of that employee. **Kevin:** Okay. Now is there any change to that system that you would make? Like if ADP allowed you to snap a photo and include it in that employee record digitally to make it super easy or anything like that? Again, I don't wanna lead the witness. Is there any experience that would be easy for you -- like magic -- to help keep track of these requests in one place that would not be too much burden on you? **Owner:** The only experience or situation that would help in any iteration of this is for each person to exercise personal responsibility and handle their own business. **Kevin:** Barring that, because obviously this still exists in the world -- is there anything else that a software experience could do or a digital experience could do or a paperwork experience that would make it easier for you to deal with? **Owner:** No. Also, because a lot of it is how the court deals with these things. And I can't change the process that the courts have in place. So I am also bound to deal with these things the way they need it. --- **Kevin:** Next question. How do you handle multiple garnishments for the same employee? For example, are there priority rules that you know about, or do you even know if these kinds of priority rules exist, or has it even happened? **Owner:** I've only had multiples with one. He owed a furniture store, and then he also had a child support order. The child support order, of course, takes precedence, but that doesn't matter on the business end because once those things come to you, like I explained before, now the business is on the hook for that. Check was just garnished for the amount that the furniture store wanted in addition to the child support. He just has to learn to suffer. **Kevin:** Okay. That tracks. Thank you. And then you already covered this, but just in case you wanna add anything else to it -- what about when a garnishment ends? How do you know when to stop withholding? Anything that you didn't share before? **Owner:** Nothing that I didn't share before. Usually, the court will send another letter in the mail or some sort of amendment altering the amount or telling that we can stop taking the deductions. **Kevin:** Okay. Thank you. That concludes pain points. --- ## Part 3: Time and Cost **Kevin:** We're gonna move into time and cost. Three questions. First, roughly how much time does a single garnishment take to process start to finish? Second, have you ever had to involve a lawyer, and how much did that cost? Third, does your payroll provider charge extra for garnishment processing? So we'll go back to question one. Roughly, how much time does a single garnishment take to process start to finish? **Owner:** About as determined by the court. **Kevin:** I think it means like, for you to process it in the system specifically. **Owner:** Oh, it takes no time. You know? Twenty minutes if that. Most of the time is given over to calculating percentages of what to take. **Kevin:** I'm surprised by twenty minutes myself. So that includes the ADP time and the secondary site where you might be having to set up an account or set up processing? **Owner:** Yes. **Kevin:** Oh, wow. Twenty minutes. Okay. Thank you. Next question then. Have you ever had to involve a lawyer or frankly anybody else? And then if you ever had to, how much did that cost? **Owner:** I have not had to involve a lawyer. Only because, again, once the garnishment comes to my attention, all of the legalese has already been handled in the court system, and now I'm on the hook to pay those stuff back by a deadline. Now what I do is get with the employee, dependent on how nice I would like to be, and urge them to try to deal with the situation before I have to act upon it fully. **Kevin:** Fair enough. And then finally, does your payroll provider charge extra for garnishment processing? So ADP in this case. **Owner:** No. No extra. It's just a field to fill up. **Kevin:** So this concludes our time and cost. Before we close out this section, is there anything else around time and cost that you feel like we did not cover? **Owner:** There's nothing around time and cost that we did not cover. My main thing with the entire affair is that it is a lack of personal responsibility that the person has failed to do or flat refuses to do which brings it to my table. So once it gets to me, I have very little sympathy. **Kevin:** Okay. Well, that wraps up time and cost. --- ## Part 4: Communication **Kevin:** How do you communicate with the employee about it? Is it awkward? **Owner:** It is not awkward at all because again, this is a situation that existed for some time prior to it getting to my desk. So they are fully aware of it, whether they're running from rent or running from furniture payments or running from child support, they have full knowledge of it before it gets to me. So I just drop it in their lap. I will give them an opportunity to rectify it. And if they won't or can't, then I really do have to act because, again, the company is on the hook. **Kevin:** That makes sense. Do you ever have to respond to the court or the creditor? What does that look like? **Owner:** I do not have to respond to the court or the creditor because once the garnishment is presented, that is essentially an order that I cannot refuse. **Kevin:** Is there a portal or system you log in to, or is it all paper and phone? I believe you kind of answered this, but if there's anything else you wanna add, go ahead. **Owner:** It would depend. With the child support system -- and I guess different states run things differently -- here in Virginia, there is a state portal that you enter the information in and you pay the child support authorities their due through that. --- ## Part 5: Scale and Frequency **Kevin:** How often do you get these garnishment requests? Roughly how many per year? **Owner:** I would say four per year. **Kevin:** And then is it always the same type -- child support, levy, creditor judgment -- does it vary? I believe that it's already been covered but feel free to add any color here. **Owner:** It varies. Probably half and half. Depending on the hiring and firing of different team members. --- ## Part 6: The Dream **Kevin:** Now we're gonna talk about the dream. Feel free to be as creative or "I wish x, y, and z would happen" -- I would say your starting point would be don't necessarily think that the dream includes not receiving garnishments because I think that's probably gonna be a fact of life. But the dream starts with alright, what's my dream scenario in handling these garnishments as they come in? If you could wave a magic wand, what would make this process easier for you? **Owner:** Well, I think I would like to hear from you because I can't think of any. My dream is that everyone handle their own business before it gets to my plate. Reiterate the personal responsibility factor. Especially with the child support and you're just running from job to job to job to escape paying. Eventually, it catches up with you. You have to pay the piper at some point. That goes with taxes. That goes with car payments. Until they find it and repossess it. The list goes on and on. People need to own up to what they do and handle their own business. That is my dream. **Kevin:** Fair enough. I don't wanna lead the witness too much, but in my mind, I was thinking -- right now you said you deal with the ADP system and then you deal with various other systems. My mind always goes to simplify. Is there an experience that you could imagine you could maybe handle it all within one system or something like that? **Owner:** I cannot foresee a centralized spot for making things simpler. Only because garnishments come from many different organizations, entities, and what have you that want payment or repayment in many different forms. And because of that, I think it would be very, very hard to do anything other than deal with them individually. **Kevin:** And would you pay for a tool that handled this automatically? **Owner:** I would not pay for a tool because I don't have enough employees that I can't handle it myself. But a larger organization -- they may not need a tool but they have the personnel. For example, maybe an entire HR department. And one or two people that specifically deal with those things, and that's what they deal with on a daily basis. I don't have that volume, so it's all able to be handled by me in relatively short order. **Kevin:** And then finally, what would good look like to you? **Owner:** My answer will begin and end with personal responsibility. As far as being informed via phone or email or anything like that -- emails can be ignored. Phone numbers can be blocked or ignored. So I have no problem with a process server, a human being actually delivering the garnishment. And or a sheriff's deputy. Because these people are actually tracking you down and looking for you and finding you. And that's why they're sending a human being because they want to be sure that they get in touch with another human being to start the process. ## Part 7: Payment Mechanics & Closing **Kevin:** One thing -- just confirm this. Are all of your garnishments wired transfers? Meaning, you're supplying your company checking account information and plugging that into a system and scheduling it on a regular cadence? Or are you sometimes sending a check physically? I would just like more information about the different ways in which you are either digitally or physically paying the entities. **Owner:** It's usually one of the two. In the case with the child support, that is exactly how they want it handled -- for us to log in to their site and then put the company bank information in there to pay it that way. With the other types of garnishments, like the furniture payment or this last one -- I forgot what that was, it was $800 -- in the case with the $800, there was a definite deadline for that one. That one just passed, I think the court date was April 14. So the court had to have that money paid in full by the fourteenth. So in order to make that happen, I did have to write a check to the court so that was satisfied. **Kevin:** What if, for example, you could fill in the information within ADP and they would just cut a check? Would that be helpful for you -- like a one-click situation? **Owner:** It may be helpful for a larger organization. For mine, with my company on the line and my name on the line -- because the garnishments do come with the company owner's name on it as well -- I would rather cut that check myself and ensure that that check got delivered to the courthouse myself. Because I want to make sure that everything is in place. I would not trust electronics for that. **Kevin:** Any other thoughts as we reflect back? We went through the current process, pain points, time and cost, communication, scale and frequency, and your dream situation. Anything that we did not cover? **Owner:** No. I think we did cover it all. One thing that I have offered to my folks in the past -- I do offer them a financial whatever you might call it, a financial book, as well as some good old "let's sit down and do you have a question about this? Do you know how to handle this type of situation?" to help them with their financial problems before it turns into something large such as a garnishment. Sometimes they take us up on it. Sometimes they don't. A lot of times they come to us with those problems. So it's a toss-up, but I at least try to help the folks before it gets into the legal part. **Kevin:** So what I'm hearing from you is two possible opportunities. One, maybe a way to share with them financial planning tools of some sort. And then I think of another situation -- I know all your employees are 1099, but it almost feels like a benefit. I know occasionally you have offered a loan to your employees and deduct payments from their paychecks. Do you think that one or both of those services could be helpful to your employees? **Owner:** Those services would be quite helpful for them. I've done it before. I've given them a micro loan or a mini loan or whatever you call it. Some to handle garnishment, some to get work on their vehicle or repair work on their vehicle. And they pay it back over time before it gets into a larger problem. My latest unfortunate story is one of my folks has not been paying his mortgage, so he is behind three months. And now he's about to lose his residence to foreclosure. But his pride got in the way from asking for help. And so now it's too far gone for me to be able to help -- whether that be advice or trying to help him catch up on the rear. **Kevin:** Anything else you want to add before we close out? I think we covered a lot of ground today. **Owner:** No, we covered it all. **Kevin:** Well thank you, my friend! --- ## END OF INTERVIEW