Attachment of earned income - less burden for the employer, more transparency for the debtor

The employer is particularly affected by garnishments because he regularly has the debtor's only attachable income. The regulations governing garnishments are in part outdated and complicated. Even if initial reform steps are going in the right direction, a fundamental simplification of garnishment law is still pending.

The employer is the addressee of the majority of all garnishment and transfer orders. In large companies, it is common for up to 2,000 garnishment and transfer orders to be issued each month. As a result of its position as third-party debtor, the employer has obligations which it must fulfil even though it has no influence on the financial circumstances of the debtor (employee). The processing of garnishment and transfer orders is currently a complex and time-consuming task, which in company practice is carried out by payroll accounting experts. Despite IT support, the calculations and other work steps have to be carried out manually. Now that the first step has been taken to reform account attachment protection, a reform of the other attachment protection regulations is still pending.
Since 1 January 2012, account garnishment protection has been possible exclusively via the so-called P account. Every account holder can demand from his bank that his current account be managed as a P account in future. This then offers automatic basic garnishment protection in the amount of the garnishment allowance. The previously necessary route via the enforcement court has thus become obsolete. This simplification may also have a positive effect for companies if creditors increasingly forego wage garnishment with the employer in the future and instead address the employee directly.
Reform of the garnishment law neglected
The Pfändungsschutzkonto-Fortentwicklungsgesetz (PKoFoG), which will come into force in the course of 2021, is intended to remedy practical problems with garnishment protection. Employers will not be relieved by the legal reform, but will be burdened with new obligations to provide evidence. The new Section 903 (1) no. 2 of the German Code of Civil Procedure (ZPO) will oblige employers to issue a certificate for the increased amounts of the P-account. This results in further administrative tasks as well as liability risks which cannot be justified in terms of the legal system.
Modernise and simplify attachment rules
In addition, further reform steps are necessary: What is needed is a legal basis for bearing the costs of fulfilling third-party debtor obligations. The processing of a garnishment and transfer order costs approximately € 30 per month and garnishment. These costs are currently mainly borne by the employer. It would be conceivable to have a regulation, based on the corresponding regulations in Austria, according to which a certain percentage of the garnishment allowance can be demanded as a lump sum from the debtor (employee) by the third-party debtor (employer).
To the extent that the employer relies on information derived from the wage tax card in processing an attachment, it should be made clear that the employer is not required to verify the information but may rely on it.
19. November 2020