A buried provision in Michigan's new civil procedure bill significantly expands liability for employers who retaliate against workers involved in garnishment actions.
Most Michigan professional services owners don't realize that a provision buried in SB1137 has quietly changed the cost of retaliating against an employee or contractor over a wage garnishment—and made that cost substantially higher.
Under Section 4015 of SB1137, Michigan employers are now prohibited from disciplining, discharging, refusing to hire, or refusing to contract with a worker because of a garnishment action. That rule existed before. What's new is the remedy.
Previously, if an employer violated the anti-retaliation rule, a court could order reinstatement of the employee. That was the main remedy available.
Under the revised law, a court judgment now requires three things: reinstatement, full back pay and benefits, and the employee's attorney fees. The addition of mandatory attorney fees is the critical change. It shifts the economic calculation entirely.
For small and mid-sized professional services firms, this transforms a garnishment-related employment decision from a manageable risk into a potentially expensive one. If an employee is subject to wage garnishment and you terminate them—even for an unrelated reason—you now face not just the cost of reinstatement and back pay, but also paying the other side's legal fees to defend the claim. That fee-shifting provision makes litigation economically attractive to plaintiffs' attorneys, which increases the likelihood of claims being filed.
The provision applies to hiring decisions too. Refusing to hire or contract with someone because of a pending or existing garnishment now carries the same three-part liability.
Any Michigan employer—including professional services firms, staffing agencies, and contractors—is subject to this rule. It applies to employees and independent contractors.
The provision takes effect 180 days after SB1137 is enacted, per the bill's Enacting Section 1. Once that window closes, the new standard applies to any garnishment-related employment action.
Review your hiring, discipline, and termination practices. Document the legitimate, non-garnishment reasons for any employment decision involving someone subject to wage garnishment. Train managers and HR staff on the distinction between a lawful business reason and retaliation. If you use independent contractors, apply the same standard.
This is not legal advice, and the specifics of your situation matter. A Michigan employment attorney can review your policies and help you understand how this change applies to your firm.
Source: Michigan SB1137, Section 4015, Enacting Section 1.