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El Salvador – Wage garnishments
Publications || 2019 || El Salvador – Wage garnishments

El Salvador – Wage garnishments

by charbds, 18 February, 2019

February 18, 2019
Manuel Rosa / mrosa@bdsasesores.com
Attorney at law BDS El Salvador

Wage garnishments is one of the most frequent topics of consultation when it comes to labor counseling. It should be noted that this is a precautionary measure ordered by a Court as a result of nonpayment of a debt, that is, a default on an obligation.

It is common to hear that collection agents threat debtors with the garnishment of their assets or even their wages, but we must clarify that for a garnishment to exist, this must be supported by court order, and even in this scenario the Law protects debtors by imposing limits to creditors.

According to the Civil and Commercial Procedure Code, in El Salvador there are assets that may not be subject to garnishment, such as household goods, those intended for religious confession, those that in the court’s discretion may have a lower value than any expenses necessary for its enforcement, etc. Also, the same legal instrument declares as nongarnishable any wages, salaries, pensions, remunerations and the like provided that these do not exceed the equivalent of two minimum wages.

In this same line, the State protects the underage children of workers, as the safeguarding of wages considered as the worker’s main source of livelihood is not subject to these limits when it comes to child support. Thus, it is clear that lawmaker’s intention in this case was to protect the worker’s underage children.

It should also be noted that in case of default, debtors, co-debtors and guarantors have something in common: they can be enforced to pay the debt. Therefore, we should bear in mind that both the law and this specific provision intend to ensure that debtors fulfill their obligations, as otherwise debtor’s credit record may be affected thereby limiting their access to credit facilities in the future.

However, when the company is visited by a garnishment executor bearing a court order, said company is under the obligation to conduct any relevant deductions as the Court should abide by the limits set forth in the law. It is not uncommon to find court orders that fail to establish the amounts to be deducted, which is why it is necessary to be aware of the limits of wage garnishments set forth in Article 622 of the Civil and Commercial Procedure Code, which establish percentages depending on the salary earned by the relevant worker.

During the garnishment process, the executor appointed by the Court must designate a depositary entity of the amounts to be withheld; as a general rule, this designation relies on a company’s employee of the payroll department. It is important that as soon as the court requires a report on any amounts withheld, such report be submitted in a timely and expedite manner to avoid hampering the course of the judicial process.

It is also important that companies are familiar with what should be done in case they get to receive a court order to deliver the withheld amounts, and for these purposes they must always verify the following: the existence of an original version of the decision issued by the court that ordered the garnishment, which should also be signed and sealed by the judge; said court document must also include the amount of money to be delivered, as well as the person authorized to receive said monies for which purpose the identity document of said individual should be enclosed.

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