Effective January 1, 2021, several key components of Georgia’s existing garnishment code were amended. The main changes are discussed below.

Who Can Be Served?

Plaintiff-creditors may now serve garnishments on a defendant-debtor’s employer or another person or entity “under periodic obligations for payment” to the defendant-debtor.

Calculating Disposable Earnings for Non-Employees/Independent Contractors

Questions have arisen with regard to how to calculate “disposable earnings” in the case of defendants that are not employed by the garnishee subject to federal and state income tax withholdings (i.e., independent contractors). The amended garnishment code provides:

A garnishee in a garnishment action in which the defendant is not an employee of such garnishee subject to federal and state income tax withholding by said garnishee shall be considered to have no knowledge of, nor any obligation to determine, the disposable earnings for such defendant and may, without liability to any party or nonparty, answer the summons without regard for any potential exemptions based on disposable earnings until such garnishee is served with, or consents to, a court order or a filed modification form as described in subsection (d) of this Code section in the pending garnishment action containing an alternative and enabling basis for determining the amount subject to garnishment.

Therefore, if a company is served with a garnishment related to a non-employee/independent contractor, we anticipate that the wage garnishment amount will be calculated based on 25% of earnings without regard to tax deductions, unless the plaintiff-creditor and defendant-debtor agree in writing to voluntarily reduce the amount and the modification order is filed with the garnishment court and served on the garnishee.

Length of Garnishment Extended

The length of continuing wage garnishments is extended from 179 days to 1,095 days (or three years) from the date of service of the summons of continuing garnishment. Garnishees must file an initial answer to the garnishment not sooner than 30 days and not later than 45 days from the date they are served with the summons of continuing garnishment (as well as serve courtesy copies to the plaintiff-creditor and defendant-debtor), and additional answers no later than 45 days after the last answer until the garnishment summons expires. A final answer must be filed when the balance on the summons of garnishment is paid, when 1,095 days expires or when the relationship between the garnishee and defendant is terminated (which includes the termination of employment as well as cessation of periodic payment obligations from garnishee to defendant).

Student Loan Garnishments

For private student loan garnishments, the maximum part of disposable earnings subject to garnishment is now 15%.  Previously, the amount garnishable was 25% of disposable income (which is still the case for most other wage garnishments in Georgia).

There are additional modified procedures addressing, among other things, defaulted garnishments and service requirements.  It is very important to be cautious in responding to garnishment matters.  State laws often allow a plaintiff to collect the full amount of the employee’s debt from an employer that does not follow the requirements for responding to a garnishment order.  Therefore, if a company does not timely and correctly answer a garnishment order, it can become responsible for an employee’s personal debt.  Employers must therefore always consult each individual garnishment or wage withholding order for implementation details.  Conferral with the issuing body may also be necessary.