Most employers are familiar with garnishments of employee wages. One day a Writ of Garnishment will come in the mail with very long complicated instructions regarding determining the amount of the garnishment. If garnishments were not already complicated enough, the Nevada legislature recently passed Assembly Bill 37 (AB 37), which expands an employer’s obligations regarding garnishments. It goes into effect on October 1, 2021.
AB 37 applies specifically to child support orders and amends the procedures applicable to employers’ garnishment of employee wages. Currently, the law defines “income” for purposes of child support as: (1) wages, salaries, bonuses and commissions; (2) any money from certain other persons or entities from which support may be withheld; (3) any other money due as a pension, unemployment compensation, a benefit because of disability or retirement, or as a return of contributions and interest; and (4) any compensation of an independent contractor.
Under AB 37, the scope has been expanded to include lump sum payments. As defined in AB 37, lump sum payments include: (1) a commission; (2) a discretionary or nondiscretionary bonus; (3) a productivity or performance bonus; (4) profit sharing; (5) a referral or sign-on bonus; (6) an incentive payment for moving or relocation; (7) an attendance award; (8) a safety award; (9) a cash payment award; (10) termination pay; (11) severance pay; and, (12) any other one-time, unscheduled, or irregular payment of compensation.
If an employee that is subject to a child support garnishment is going to receive a lump sum payment in the amount of one hundred and fifty dollars ($150.00) or more, the employer must inform the enforcing authority named in the child support order at least ten (10) days before it intends to release the lump sum payment to the employee. The notice provided by the employer to the enforcing authority must be on a form prescribed by the Division of Welfare and Supportive Services of the Department of Health and Human Services (DWSS). Within ten (10) days of receiving the notice of lump sum payment from the employer, DWSS will provide written notice to the employer that states the amount of the lump sum payment that the employer must withhold and deliver to the enforcing authority.
An employer may not make the lump sum payment to the employee before the date the employer informed the governing body that it was releasing the payment, or the eleventh (11th) day after the employer has informed the enforcing authority of its intention to release or the date that the employer receives written notice from DWSS, whichever is earlier. If an employer refuses to withhold money or intentionally fails to deliver money from an employee’s wages to an enforcing authority pursuant to a child support order, AB 37 authorizes a court to impose penalties on that employer.
Due to the complexity of garnishment laws and the potential penalties employers could face for failing to follow these laws, it is important to stay up to date with changes in the laws and employers should be well versed on what they are required to do when they have an employee that is subject to a garnishment.
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