Employee Garnishments And The Franchisee

One of the features of the 7-Eleven system is the support services provided by 7-Eleven, Inc. (SEI). Among these services are the payroll processing, payroll tax reporting and the payment of withholdings. Unfortunately, the employees hired by franchisees do not always lead exemplary lives. Additionally, these difficult economic times may permeate the family unit, resulting in creditors seeking all remedies legally available to collect a debt. This may include the garnishment of wages.

The garnishment of an employee’s wage is a legal recourse to collect a debt including interest, attorney’s fees and court costs. To garnish an employee’s earnings, the creditor must initiate legal action in the system to obtain a court order compelling an employer to withhold a portion of an employee’s paycheck, which is limited by federal regulations. The employer must then remit the withheld wages to the creditor.

In the 7-Eleven payroll system, SEI will deduct from the franchisee’s employee’s weekly earnings and remit the money withheld from the paycheck to the creditor. The franchisee will receive the court order and is required to respond in a timely manner. If the garnishment is for a former employee or an individual who never worked for the franchisee, it is the franchisee’s responsibility to respond to the court and the creditor. Failure to do so may make the franchisee responsible for the debt.

SEI erroneously distributed an email in August 2011 notifying franchisees to send all garnishment notices via the Dell scanner in the backroom using Option 5, Human Resources. This is incorrect. Accounting Customer Service and the Payroll Department still request the franchisee call to establish a CHD case and then fax the garnishment notice and other included documents. SEI will then answer the garnishment notice and begin the deduction and remittance process.

Multiple store franchisees may have other difficulties. For all the improvements, SEI still has not integrated the payroll system for multiple store owners.

SEI’s payroll system is incapable of deducting a garnishment when a franchisee’s employee works at more than one store. The garnishment can only be assigned to one store. Federal law limits a garnishment from deducting more than fifty percent of the employee’s net pay. Because the SEI system only recognizes earnings applied against the garnishment from the employee’s home store, an insufficient amount or no amount may be garnished from the employee’s paycheck.

7-Eleven used to be touted as a single-store franchise system. The changes in policies by SEI have resulted in franchisees becoming multiple store owners in order to generate a livable income. With multiple stores, a franchisee’s employee may work at more than one location. Due to the shortcomings in the SEI payroll system the multiple-store franchisee should take extra care to ensure a garnishment is properly processed by SEI. This may include changing an employee’s home store to reflect where the employee actually works; working with SEI to have a proportionate amount deducted from the employee’s earnings from the stores actually worked; or scheduling the employee at only one store.

Remember, ultimately the employer is responsible for the garnishment of their employee’s wages. Failure to do so may result in the creditor lawfully requiring the employer to pay the full amount of the garnishment.