How a garnishee order affects your company
Garnishee orders do not only affect an organisation financially but also result in operational challenges. They can also cause adverse effects on a company’s day-to-day operations, especially if the company is dealing with multiple garnishments. In case of employee’s wages being garnished, the company may need to set aside time and resources to process the garnishment, impacting HR and payroll functions, a process which may distract management from their core business activities. Furthermore, when the company is directed to release funds from its bank accounts or other financial assets, it may find it difficult to access the funds needed for operational purposes, such as paying suppliers or contractors.
Garnishee orders have a tremendous bearing on employee relationship and morale. It has been noted that employee motivation remains one of the certain ways of boosting productivity. Garnishee orders can complicate a situation as inaccessibility of funds may result in the organisation failing to pay its employees’ wages on time thus straining the relationship. In addition, when the company’s assets are attached for failing to meet their regulatory obligations, the negativity has a rippling effect. While the image of the organisation will be tainted in the public sphere, the employee’s morale will be diminished.
Another issue created when the company’s assets are attached is an administration problem. The company is responsible for ensuring that the process is handled correctly, this includes monitoring the garnishment. The company must track and manage garnishments over time, ensuring that the correct amount is withheld and paid to the creditor. The company must be aware of and comply with the jurisdiction’s laws regarding garnishment and the administration department is responsible for ensuring that the company remains within the legal and regulatory confines.
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