QUESTION

I signed an employment agreement that if I resign within a year a must repay a bonus. Can future pay at another job be garnished?

Asked on Mar 14th, 2022 on Employee Benefits - New York
More details to this question:
The job was making me physically sick. Increased weight and increased blood pressure. I signed an employment agreement that said if I leave within a year I must replay the bonus I received of $35,000. If taken to court. Can (a) I be required to pay and (b) can future wages be garnished (c) effect credit rating? Repayment of Guaranteed Award: If you resign (or give notice of your resignation) or your employment is terminated for Cause (or you are given notice that your employment will be terminated for Cause) within the one year period following your Start Date, you will repay the gross amount of the cash portion of your Guaranteed Award within 30 days of your termination date. You acknowledge and agree that the Guaranteed Award does not constitute wages or earned compensation of any kind, and that by accepting this offer and signing below, you expressly authorize “The Bank” to deduct any amounts owed pursuant to this paragraph from any account that you maintain with “The Bank” .
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1 ANSWER

Labor and Employment Attorney serving Tarrytown, NY at Urba Law PLLC
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Garnishment is by definition a judicial proceeding. That means that a court order would need to be pursued and entered or recorded by some clerk of court. Apparently you have cut and pasted a part of an agreement with your former employer. The language appears to mean business. In other words it looks like no nonsense terms. It would not be unusual to find prevailing party's attorneys' fees and costs awardable as well since you apparently agreed to this remedy. As a side note, if prevailing party attorneys' fees and costs are available you might owe several times the amount you fear being garnished plus interest and possibly other remedies. The wisest option might be to have a skilled employment lawyer review all documents which governed your prior employment relationship. Most of these matters are resolved pre-litigation since employees sometimes lose their former and current jobs if they failed to disclose everything they were obligated to disclose to secure a new position. The worst case scenario might be losing the former job, being let go from your current position, and owing several times the amount you suspect you may have to repay. And if you did not report that money on your tax return, there may be IRS or state or local tax penalties for not doing so as well. Speak with a tax lawyer. Calling a payment "not wages or earned compensation" does not mean that you are not subject to reporting the amount on your taxes or paying taxes on it yourself. Were I facing this scenario I would lawyer up immediately because waiting longer is very likely to cost much more than resolving it pre-litigation. Just a suggestion from New York's Employment Law Reality Check law firm.
Answered on Mar 15th, 2022 at 6:46 AM

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