A wage assignment is a deduction from an employee’s pay used to pay debts or support. Voluntary assignments show effort to repay loans, while involuntary assignments suggest unreliability. Governments prioritize debts, and employers may charge for voluntary assignments.
A wage assignment is a deduction from an employee’s pay, which can be used to pay debts or to pay child or spousal support. Some loans stipulate a salary allowance in case you do not make timely payments to repay the loan. In this case, if the loan is not repaid, money is deducted from an employee’s paycheck, either a specified amount or a percentage of earnings to collect on debts owed.
There are two types of wage assignment. One is voluntary, where an employee specifically asks his employer to deduct a portion of his salary to be paid to a designated third party. This is often easier for people than remembering to write important checks for loans or child support, or for things like paying back taxes. The voluntary assignment of wages tends not to reflect badly on the employee, as it shows that the employee is making a genuine effort to repay a loan or to meet financial obligations to others.
The second type of wage assignment is involuntary. It can also be called a wage garnishment. This second type can occur when a person refuses to pay debts or agrees to pay a third party. Wage assignments of this second type may need to be honored by employers and may be requested by court order. Again, the amounts may vary depending on the financial obligations of the employee. Some salary assignments that are involuntary take a percentage of a paycheck, almost the entire paycheck, or a fixed amount. If an employee’s earnings go up or down, third parties may receive more or less money when the allowance is based on a percentage.
If you have a fixed payment to make, such as child support, creating a voluntary wage assignment isn’t a bad way to go. An involuntary assignment or garnishment of the paycheck suggests that you may be unreliable or unable to meet your obligations. It implies, even when this is not the case, that you have specifically resisted paying your debts, or worse, paying child support or spousal support. This can be reflected in the character of the employee and can determine his future in a company.
Some people, if they have a lot of debt, may have more than one salary allowance in a paycheck. Governments generally set a priority of the debts that must be addressed first. If there is enough money to cover all debts, the employee can still make voluntary wage assignments, although some employers charge for this additional service. When the allocation is involuntary, companies generally must comply with the mandatory allocations, in the order that the government determines. When there is income that supports a person, the wage allowance usually cannot eliminate all the money they earn. Most tasks must allow an employee to earn a subsistence income, unless that employee voluntarily allocates her salary differently.
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