Employee with debts or attachment of earnings

Identify staff with debts

Indebted employees often make no mention of their problems and make every effort to act normally at work. But there are signs which may indicate that an employee has money problems, such as:

• stress
• loss of concentration
• regular brief sick leave
• requests for an advance of salary or holiday pay
• not joining in social activities.

Sometimes major life events cause financial problems, such as divorce or the death of a partner. Recognise debt-related problems at an early stage and discuss them with your employee. Someone who registers for debt support early can solve their problems more quickly.

Refer your employee to help with debts

If there are payment arrears or financial problems, refer your employee to the article How can I settle my debts? (in Dutch). This will tell your employee what help is available if they are having difficulty paying their bills and what rules apply to payment problems or debts.

Local authorities help employees with debts

The first port of call (in Dutch) in the event of indebtedness is your employee’s local authority. The municipality will advise, within 4 weeks of a request, whether someone is eligible for assistance, and in what form. In a crisis situation, for example if your employee is evicted, the local authority must help within 3 days. Debt restructuring comes in various forms:

• Your employee applies for debt relief to the municipality. Creditors voluntarily cooperate with a debt repayment plan: this is known as an amicable route to debt relief.
• Your employee applies to a court for debt rescheduling: this is a route under the Debt Rescheduling for natural persons Act (Wet schuldsanering natuurlijke personen, WSNP).

You must cooperate with an attachment of earnings

Creditors may call in a bailiff to force your employee to settle their debts. The bailiff may levy attachment on part of your employee’s income, which is known as attachment of earnings order. They can only do this if they have a writ of enforcement or court order. Some government departments can bypass the courts when levying attachment. They have special powers of collection (in Dutch). For example:

• The Netherlands Tax Administration (Belastingdienst) for collecting arrears of payment.
• The Central Administration Office (CAK) for collecting the care premium required by administrative law.

A debt collection agency or creditor cannot themselves levy attachment on earnings. Attachment of earnings is not a valid reason for dismissal. You cannot charge your employee the costs of an attachment of wages.

Important stages in an attachment of earnings:

1. You receive a writ of attachment from the bailiff and check it with your employee.
2. You complete the bailiff’s financial questionnaire.
3. Check with your employee how much they are still receiving, this is ‘the protected earnings’ (in Dutch).
4. Transfer the correct amounts of pay to the bailiff and to your employee.

1. Receiving and checking a writ of attachment

You receive a copy of the judgment ordering attachment of earnings from the bailiff. You also receive a writ of attachment. This is an official document which states that the bailiff is levying attachment on the wages. Check with your employee whether the amount of debt in the writ of attachment is correct.

2. Complete the financial questionnaire: you are required to do so

With the writ of attachment is a list of questions about your employee’s income. Complete and sign this declaration and return it within 4 weeks. Please note: if you fail to do so, you may become liable for your employee’s debt. If you are handling several attachments of earnings for the same employee, complete all the financial questionnaires you receive. The bailiff who levies the first attachment has to process all the other attachments, so refer the second and subsequent bailiffs to the first.

3. Check the amount of protected earnings

The bailiff uses the information you supply on the financial questionnaire to calculate the protected earnings. That is the portion of the wage that your employee is allowed to keep for subsistence and regular outgoings. Therefore a bailiff can never levy attachment on the entire salary. Check with your employee whether the amount of protected earnings is correct. Advise your employee to object to an attachment of wages if the amount withheld is too high. They can find legal advice at the online Legal helpdesk (Het Juridisch Loket).

4. Transfer the correct amounts

Your payroll accounts department needs to know that attachment has been levied on wages. Your employee no longer receives the full amount of their salary. Transfer the protected earnings to the employee. The balance is for the creditors. You transfer that amount to the bailiff and any authorities which require you to make deductions. Continue to do this until you receive official notification that your employee’s debts have been settled. You can stop only at that point.

Some government departments take precedence over other creditors

Claims of certain government organisations receive priority over other creditors, for example, the Tax Administration and the UWV. They hold a ‘preferential claim’.

Consider your employee’s privacy

An attachment of earnings makes you privy to sensitive personal information, so keep the documents about the attachment of your employee’s wages safely in your (payroll) accounts. If you receive official notification that the wage attachment has been lifted, destroy all documents (in Dutch) regarding it. The obligation to retain documents for 5 or 7 years does not apply to an attachment of earnings.

Take preventive action

As a good employer, you can contribute to preventing employee indebtedness. By giving timely information, you make financial problems easier to discuss. For example, arrange for a budget coach (in Dutch) to hold a workshop. Or provide a permanent point of contact, such as an HR adviser or confidential adviser, to whom staff with money worries can turn. You can also make a flyer (in Dutch) or online document about attachment of earnings for your staff. This way everyone it your company knows how you deal with it. Find more tips at www.financieelfittewerknemers.nl (in Dutch).