What is an Attachment of Earnings Order (AEO)?

An Attachment of Earnings Order is a legal court order that mandates an employer to withhold a portion of an employee's paycheck to repay a debt owed by the employee. AEOs are typically related to unpaid taxes, court-ordered payments, or child support obligations.

How does an AEO affect employees and employers?

An AEO impacts employees by deducting a portion of their wages to satisfy a debt obligation. Employers are legally obligated to comply with AEOs and facilitate these deductions from their employees' paychecks.

Which countries commonly use AEOs, and do other countries have similar concepts?

AEOs are utilized in several countries, including the United States, Australia, New Zealand, Canada, and the United Kingdom. Similar concepts exist in other countries; for instance, France has "wage garnishment," and Spain has "wage embargo."

What are the different types of AEOs?

There are various types of AEOs, including:

• Ordinary AEO: Used to cover debt owed to a single creditor.
• Priorities AEO: Specifies the order in which multiple creditors should be paid when the employee owes money to more than one creditor.
• Consolidated AEO: Combines multiple debts into one consolidated payment.
• Variable AEO: Adjusts deductions based on fluctuating income, such as weekly or monthly percentages.
• Protected Earnings AEO: Ensures that a minimum amount remains in an employee's salary for their basic living expenses.

How can organizations with a global workforce manage AEOs effectively?

Managing AEOs in a global workforce can be complex due to varying regulations and compliance requirements in each country. To streamline the process, organizations often turn to payment execution platforms. These platforms provide expert support, automate time-consuming processes, simplify administrative tasks, and offer transparent communication to both employees and employers.