Tag: Wages

Impact of wage garnishment on the business
Wage garnishment is a legal process when a court issues an order to an employer to withhold a specific amount of an employee’s salary. It is then sent to creditors or whomever the employee owes until the debt fully pay. Payroll garnishments often organize within payroll software.

Here are the articles to explain, What is wage garnishment? What is the impact on the business?

Garnishment allows a plaintiff to take a debtor’s money or property from the person or institution that holds the property. Wage garnishment refers to the exercise of an employee having a certain amount of his or her paycheck deducted to cover precise charges. A court order desires to obtain for a person to garnish a person else’s wages.

Generally, garnishments need so that a worker has to pay baby help, unpaid court prices, defaulted pupil loans, or different debts. The garnishment will remain till the entire debt pay off. There are exemptions to this exercise. If garnishment obtains under a federal court docket, then no greater than 25 percent of someone’s weekly earnings can garnish. Regarding salary garnishment laws, guidelines do not view worker earnings.

How does wage garnishment work?

The most common wage garnishment begins when a creditor (usually a bank or credit card company) sues a debtor for an unpaid debt and wins in court. This includes banks that can sue homeowners after foreclosure.

If the creditor wins in court, they will get a judgment against the customer who owes the debt. No decision will issue unless creditors prevail. The judgment made it possible for them to obtain a third-party order, which stood sent to that person’s employer.

Types of garnishment of wages

Wage garnishments typically affect employees every pay period, i.e. their disposable income affects by a creditor garnishment. The two main types of decoration include:
- Wage garnishment: Employees require by law to give some of their earnings to creditors to pay off debts.
- Non-wage garnishment: Sometimes called a bank levy, this is when a creditor can legally use a bank account to access funds.
Who is worried about Wage Garnishment?

The salary garnishment manner includes a creditor, a debtor, and a garnishee.
- The creditor is the court, kingdom, or federal business enterprise that orders debt reimbursement. It can also be a private entity that acquires the writ of garnishment to ease debt repayment.
- The debtor is the man or woman or birthday party that owes the debt. In this example, that’s the worker.
- A garnishee is a third birthday party that gets the order or writ of garnishment and holds the debtor’s assets. The organization acts as the garnishee because they “hold” wages ultimately paid to employees.
How Much Can Be Withheld for Garnishment?

Federal law — Title III of the Consumer Credit Protection Act — mandates how a good deal an organization can withhold from a worker’s earned wages.

The quantity situation to withholding carried out to a worker’s disposable income, that is the quantity closing after legally required deductions, together with earnings taxes. The maximum weekly quantity decided by one among two figures, whichever results in the lowest amount:
- 25% of a worker’s disposable income, or
- The difference between their weekly disposable earnings and 30 times the federal minimum salary (as of writing, $7.25 x 30 = $217.50). Example: $250 (weekly earnings) – $217.50 = $32.50 (most withholding).
- The 25% parent is the most commonplace calculation, with the second one simplest coming into play with earnings much less than $290 per week ($290 is the factor at which the second determinant is no longer decreased). Note that a total income much less than $217.50 can’t garnish.
The impact of wage deductions on the business

As an employer, wage garnishment needs to handle appropriately and accurately, while also remaining compliant. If a court order receives involving a wage garnishment, the employer must withhold a portion of the employee’s wages and forward them to a third party. These orders are usually issued by government agencies, such as the IRS, the U.S. Department of Education, or state tax agencies.

It is the employer’s responsibility to comply with laws relating to wage garnishment and to ensure that all orders process quickly and correctly. If done incorrectly, employers face financial and legal risks. Any mishandling of wage garnishment could result in an employer judgment for the entire employee’s debt. A lawsuit by the creditor or the employee, and other costs or penalties that the business may not have budgeted for.

This primarily affects businesses if they need employees to travel abroad or hire drivers. Companies across industries advise using Electronic Funds Transfer (EFT) not only to save time. But also to improve efficiency, streamline processes, and reduce costs. Additionally, under the CCPA, it is illegal for an employer to discipline or fire an employee whose wages garnish for a separate debt.

What Are Employer Responsibilities for Wage Garnishments?

Besides knowledge of your felony responsibility to follow through on salary garnishment orders, employers must understand their responsibilities at some stage in the system.

Notify the Employee

First, you should notify your employee immediately in writing that you’ve acquired a wage garnishment order. Some garnishments might also have a wide shape that serves this cause. In the case of a federal levy, shape 668 can cowl this communique together with your employee. It’s excellent to talk about these statistics to your employee within one week of receiving the order.

Update your Payroll System

Employers should prioritize notifying HR or payroll departments of the garnishment so applicable facts may enter into payroll and make sure bills are sent to the appropriate corporation or entity.

Familiarize Yourself with State Requirements

Make certain you are aware of your country’s necessities, as they dictate how quickly employers have to take motion with the salary garnishment order to stay compliant.

Cease Garnishments whilst Appropriate

How garnishments give up varies from kingdom to nation and by way of debt kind. Certain salary garnishments might also define the date of termination within the preliminary order. Otherwise, an organization might also acquire a Notice of Termination for a wage garnishment order.

It’s also possible a worker may also repay their debt via the route of employment. If any of those conditions show up, the agency can forestall wage garnishment and resume well-known payroll processing for that worker.

What is the impact of wage garnishment on the business? Photo by Icons8 Team on Unsplash.
January 14, 2023
Minimum Wages: Definition, Arguments, and Objectives
Minimum wages can stand set by statute, the decision of a competent authority, a wage board, a wage council, or by industrial or labor courts or tribunals. Minimum wages can also exist set by giving the force of law to provisions of collective agreements. It commonly accepts that workers should give at least minimum wages to enable them to lead a minimum standard of living. Then a question arises – What is a minimum wage? It is, however, difficult to define “minimum wage’’. However, it may define as a wage that is just sufficient for the worker to keep his body and soul together.

Introduction to Minimum Wages: Meaning, Definition, Arguments, and Objectives.

First, do you know “What does mean the Wages?” Now learn, that the Minimum wage has stood defined as the minimum amount of remuneration; that an employer requires to pay wage earners for the work performed during a given period; which cannot reduce by collective agreement or an individual contract. The purpose of minimum wages is to protect workers against unduly low pay. They help ensure a just and equitable share of the fruits of progress to all; and, a minimum living wage for all who stand employed and in need of such protection.

Definition of Minimum Wages:

They can also be one element of a policy to overcome poverty and reduce inequality, including those between men and women. Minimum wage systems should define and design in a way to supplement and reinforce other social and employment policies, including collective bargaining; which uses to set terms of employment and working conditions.

The committee on fair wages defines the minimum wage as an irreducible (minimum) amount considered necessary for the sustenance of the worker and his family; and, the preservation of his efficiency at work. The Fair Wages Committee considered that “a minimum wage must provide not merely for the bare subsistence of life but the preservation of efficiency of the worker. For this purpose, the minimum wage must also provide for some measure of education, medical requirements and amenities”.

As well as:

Such a minimum wage may fix by an agreement between the employer and the workers but it is generally determined by legislation. The workers generally demand that the minimum wage should base on the standard of living but the employers argue; that it should base on the productivity of labor and the capacity of the industry to pay.

Minimum wages defines as,

“The minimum amount of remuneration that an employer requires to pay wage earners for the work performed during a given period; which cannot reduce by collective agreement or an individual contract.”

But it should note that while fixing the minimum wage, the worker’s family should also take into account. The wage should sufficient not only to maintain himself but also his family in a reasonable standard of living. Then a question arises – What is the size of the worker’s family? It now generally accepts that a worker’s family consists of five-person – the worker and his wife and three children.

Minimum Wages: Definition, Arguments, and Objectives; Image credit by thedailybeast.

The minimum wage must fix in such a way that it is sufficient to provide a reasonable standard of living to the worker and his family. Thus, while fixing the minimum wage, three principles should take into account – the living wage, the fair wage, and the capacity of the industry to pay. While fixing the minimum wage, the capacity of the industry should take into account. If a particular industry is not able to pay the minimum wages to its workers; then it has no right to exist in the business.

Background:

A minimum wage was introduced by the Labour government on 1 April 1999 at a rate of £3.60 per hour for workers over 21 years of age, and £3 per hour for 18–21-year-olds; this was raised by 10p per hour in 2000. At the time, the Low Pay Unit estimated that 2 million people (8.3 percent of the workforce) would gain from this, the main beneﬁciaries being women, especially in social care (e.g. child care) and cleaning jobs. Other areas where there is traditionally low pay, and which would beneﬁt, were young people (200 000); hospitality (295 000); and retail (300 000).

Arguments for introducing a Minimum wage and also Against:

The following are;

For introducing:

Arguments for introducing a Minimum wage.

For Against:

Arguments against introducing a Minimum wage.

Objectives of Minimum wages:

The objectives of minimum wages are as follows:
- To prevent the sweating of workers in organizing or unorganized industries.
- Prevent the exploitation of workers and enable them to obtain wages according to their productive capacity, and.
- Maintain industrial peace.
In organized industries where the trade unions are powerful; the employers generally yield to the demands of the workers for fixing a proper wage. But in the unorganized industries where the trade unions are not found, government interference and legislation become essential to ensure that the laborers do not exploit and pay at least the minimum wage.
December 31, 2019
Introduction to Wages: Meaning, Definition, Types, and Methods
What does it mean by Wages? A fixed regular payment earned for their services typically paid on an hourly, daily or weekly basis. Wage compensation pays to employees for work for a company during a period. Wages or labor charges always pay based on a certain amount of time, the article explains below along with their topics Meaning, definition, types, and methods. For example; Employees who receive labor charges cannot also receive a salary, but they can receive a commission. A commission is a payment for a specific action. Commissions are most commonly found in the sales industry. Salesmen and women often pay a base wage and then paid a commission based on how many sales they make during a period.

Know and Understand the Wages and their Introduction, Meaning, Definition, Types, and Methods.

Lower-level employees pay based on the amount of time worked. These employees usually have a timesheet or time card to keep track of the hours worked per week. Most modern employers have computerized systems to keep track of hourly employee hours. Employees must log into the system and log out to record their hours worked. Depending on the state, these employees then pay once a week or once every other week. Hourly employees must receive overtime benefits if they work more than 40 hours each week.

Meaning of Wages:

Wages are the reward paid to the worker for his labor. The term “labor”, as used in Economics, has a broad meaning. It includes the work of all who work for a living, whether this work is physical or mental.

It also includes the exertions of independent professional men and women like doctors, lawyers, musicians and painters who render service for money. In fact, “labor” in Economics means all kinds of work for which a reward is paid. Any type of reward for human exertion whether paid by the hour, day, month or year and paid in cash, kind, or both call labor charges.

Definition of Wages:

Here are below the definition of wages defines by different authors.

According to Benham;

“A wage may be defined as the sum of money paid under contract by an employer to the worker for services rendered.”

According to A.H. Hansen;

“Wages is the payment to labor for its assistance to production.”

According to Mc Connell;

‘Wage rate is the price paid for the use of labor.”

According to J.R. Turner;

“A wage is a price, it is the price paid by the employer to the worker on account of labor performed.”

Types of Wages:

Labor charges typically paid on an hourly, daily or weekly basis. In real practice, wages are of many types as follows, and also you’ll understand their methods below are:

1] Piece Wages:

Piece wages are the wage paid according to the work done by the worker. To calculate the piece wages, the number of units produced by the worker takes into consideration.

2] Time Wages:

If the laborer pays for his services according to time, it calls a time wage. For example, if the labor pays a dollar $5 per day, it will term as a time wage.

3] Cash Wages:

Cash wage refers to the labor charges paid to labor in terms of money. The salary paid to a worker is an instance of cash wages.

4] Wages in Kind:

When the laborer pays in terms of goods rather than cash, it calls the wage in kind. These types of wages are popular in rural areas.

5] Contract Wages:

Under this type, the wage fixes at the beginning of complete work. For instance, if a contractor tells that he will pay a dollar $5,000 for the construction of the building, it will term as contract wage.

Understand the Nominal and Real Wages.

The money paid to a worker as a reward for his work knows as a nominal wage. But what money wants for? Obviously for the goods and services it can buy. By ‘real wage’, we understand the satisfaction that a laborer gets from spending his money wage in the form of necessaries, comforts, and luxuries. It means the total benefits, whether in cash or kind, that a worker enjoys by working at a certain job.

The following are the two main concepts of wage:
- Nominal Wage.
- Real Wage.
Now explain;

1] Money or Nominal Wages:

The total amount of money received by the laborer in the process of production calls the money wage or nominal wage. The nominal or money value of labor charges express at current prices and is not adjusted for the effects of inflation. In contrast, the value of the wage or earning that someone earns each year expresses at constant prices and therefore have been adjusting to taking into account price changes.

2] Real Wages:

Real wages mean the translation of money wage’s into real terms or in terms of commodities and services that money can buy. They refer to the advantages of worker’s occupation, i.e. the amount of the necessaries, comforts, and luxuries of life which the worker can command in return for his services. An example will make things clear. Suppose “A” receives Dollar $100 p.m. as money wage’s during the year.

Suppose also that midway through the year the prices of commodities and services, that the worker buys, go up, on average, by 50%. It means that though the money wage remains the same, the real wages (consumption basket in terms of commodities and services) reduce by 50%. Real wage’s also included extra supplementary benefits along with the money wage.

Introduction to Wages: Meaning, Definition, Types, and Methods, #Pixabay.

Understand the Methods of Wage Payment.

From the payment, wage’s can classify as:
- Cash wages or wage’s in kind, according to as the payment makes in cash or kind.
- Time wages, when the wage rate fixes per hour, per day or month.
- Piece wages, when the worker pays according to the work done, and.
- Task wages, which is a payment on a contract basis, i.e., payment for finishing a specified job.
Wage’s give different names, e.g., salaries for the higher staff, pay to the lower staff like clerks and typists, wage’s for the workers, fees for persons in independent professions like lawyers and doctors, commission for middlemen, brokers, etc., and allowance for special work or special reasons, e.g., traveling allowance, dearness allowance, etc.
April 19, 2019