Employee with debts or attachment of earnings
Is your employee experiencing financial difficulties or debt? Creditors might levy attachment on your employee’s salary. This is called attachment of earnings or ‘garnishment’. As an employer, you must facilitate this and deduct an amount from your employee’s salary. Read what to do if an employee has debts.
Recognise staff with debts
Indebted employees often make no mention of their problems and will 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 point of contact (in Dutch) for debt isues is your employee’s municipality. Within 4 weeks of a request, the municipality will advise 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. There are various types of assistance (in Dutch) with debt and money problems.
You must cooperate with an attachment of earnings
Creditors may call in a bailiff (gerechtsdeurwaarder) to force your employee to settle their debts. A debt collection agency or creditor cannot seize wages themselves. The bailiff may seize part of your employee's income: the attachment of earnings order. They can only do this if they have a writ of enforcement or court order.
Attachment of earnings without a 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.
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
In the event of attachment on earnings, you will receive a copy of the court's decision from the bailiff. You will also receive a writ of attachment (beslagexploot). This is an official document stating that the bailiff is levying attachmenton your employee's wages. Check with your employee to ensure that the amount stated in the writ of attachment is correct.
The writ of attachment (see step 1) includes a list of questions about your employee's income. Complete the questionnaire, sign it, and return it within 4 weeks. If you fail to do so, you may be liable for the 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 other bailiffs to the first.
The bailiff uses the information you provide in the questionnaire to calculate the ‘the protected earnings’ (beslagvrije voet, in Dutch). This is the portion of your employee's wages that they are allowed to keep to live on and pay their fixed expenses. So, a bailiff can never seize the entire salary.
Check with your employee whether the protected earnings are correct. Advise your employee to object to the attachment of earnings if the amount being withheld is too high. Your employee can contact Het Juridisch Loket for legal advice.
Your payroll accounts department needs to know that there is an attachment of earnings.Your employee no longer receives the full amount of their salary. You transfer the amount that they are allowed to keep to them. The remaining amount goes to the creditors. You pay this to the bailiff and, if necessary, to the public authorities that require you to withhold wages. You continue to do this until you receive official notification that your employee's debts have been paid. Only then can you stop.
Consider your employee’s privacy
An attachment of earnings involves sensitive personal information. Please take into account the privacy legislation GDPR. So, keep the documents about your employee's attachment of earnings securely stored in your (payroll) records.
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 employees from getting into debt. 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).