22nd Annual Illinois Statewide APA Conference 08/13/2015 and 08/14/2015 Lombard, IL What Payroll Needs to Know About Garnishments So You Don’t Miss the

22nd Annual Illinois Statewide APA Conference

08/13/2015 and 08/14/2015Lombard, IL

What Payroll Needs to Know About Garnishments So You Don’t Miss the Parade

Vicki M. Lambert, CPP

About the Speaker

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Vicki M. Lambert, CPP, is President and Academic Director of The Payroll Advisor™, a firm specializing in payroll education and training. The company’s website www.thepayrolladvisor.com offers a subscription payroll news service which keeps payroll professionals up-to-date on the latest rules and regulations.

As an adjunct faculty member at Brandman University, Ms. Lambert is the creator of and instructor for the Practical Payroll Online payroll training program, which is approved by the APA for recertification credits.

©2015 The Payroll Advisor

http://www.thepayrolladvisor.com/

What Is Our Focus For Today?

Terms, Definitions and Priorities

Laws & Regulations Handling in the Payroll

Office Child Support Medical support orders Federal Tax Levies State Tax Levies

Federal Agency Debt Collections

Creditor Garnishments Voluntary Wage

Assignments Bankruptcies Student Loans Doing the calculations

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Usual Suspects


Child SupportFederal Tax LevyFederal Agency Debt CollectionState Tax LevyCreditorStudent Loans*Bankruptcies*

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*Not really sure where they fit in until received

Exceptions on Priority


Federal tax levy is received prior to child support order

Federal Agency Debt received prior to tax levy but not child support

Bankruptcy may include other levies and child support and therefore goes first

Student loans fall in with creditorState tax levy and creditor depend on state

requirements

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The Laws and Regulations

©2015 The Payroll Advisor 6

The Laws


Consumer Credit Protection Act (CCPA)

Child Support Enforcement Amendments of 1984

Family Support Act of 1988Uniform Interstate Family Support ActPersonal Responsibility and Work

Opportunity Reconciliation Act of 1996

Consumer Credit Protection Act


Limits the amount that can be deducted from “disposable pay” for child support and creditor garnishments

Limits apply if more than one garnishment is in effect

Watch out for lump sum payments for child support

CCPA Limits

50% of disposable earnings if employee has second family

60% if does not Add 5% if in arrears to both State may be lower 50% is the common amount

CCPA limits apply except where state is lower

25% of disposable or the amount that exceeds 30 times the federal minimum hourly wage

Some states have severe restrictions

Federal chart furnished-as of July 2009

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Child Support Creditor Garnishments

Definition of Income


Income is defined as “any periodic form of payment due to an individual, regardless of source, including wages and salaries, commissions, bonuses, workers’ compensation, disability, payments pursuant to a pension or retirement program, and interest.”

Disposable Earnings


Disposable Income = gross pay - mandatory deductions.

Disposable income is the amount of earnings remaining after subtracting certain mandatory deductions from an employee's gross pay.

Disposable Earnings


Mandatory deductions include federal, state and local taxes; unemployment insurance; workers' compensation insurance; state employee retirement deductions; other deductions determined by state law.

Note that disposable income is not necessarily the same as net pay. An employee may have a deduction taken from his pay that is not mandatory, such as union dues or a car loan payment.

Watch out for tips to be included Limit applies even to multiple garnishmentsOther garnishments are not subtracted before determining

disposable pay

Processing Through Payroll


Set It Up In Payroll


Always date stamp on day received Each garnishment should have separate file even if multiple for

one employee Tracking system (Excel spreadsheet) separate from payroll

system for reconciliations and questions Include amounts and dates of payments Current balance due if arrears or max sum Of course, reconciliation spreadsheet for all garnishments

processed matches payroll totals Cross years, and even systems over the life of the withholding

order They can last 18 to 20 years or more

Line item on payroll pay stub for child support

Answer Back


Determine if your employee or notForm may have response includedTime allowed is usually limitedExamples: IWO—accept or reject Federal Tax Levy—send in with first

paymentCreditor Garnishment: Answer

backs for Garnishee-sometimes 20 days

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Go Tell It To The Employee


Form may include employee notification

Example: Federal Tax LevyMay be time limitAgain Federal Tax LevyShould include form letter

from payrollShould be done regardless if

garnishment requires

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Payroll Form


Create template for each type of garnishment situation you may encounter to inform the employee as to:What you have receivedPayroll it will begin onAmount of deduction Contact information for deduction

questionsDisclaimer on responsibility of

garnishment

Paying It Out


Different types of garnishments have different due dates

If you can do by pay date to make sure you comply with all garnishments and state requirements

Creditor may have to hold until all monies withheld or time is up

EFT may be required

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Security


Confidentiality is a must form has SSN on it

Anything that may be a garnishment should come to payroll first

Never discuss over the phoneOnly payroll has accessWatch out for processing through A/P

—again SSNs are on the form

Reconciling


Make sure you reconcile the G/L account each month

Spread sheet you created for tracking comes in handy now

Reconcile spreadsheet to payroll before releasing payments

Terminating Employees


Garnishments and tax levies are a per payroll event

Child support may not beTake normal deductionDo the required notificationsWatch for the state tax levies—

may require entire amount taken

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CHILD SUPPORT

22©2015 The Payroll Advisor

Withholding and Paying Child Support


Uniform Notice to Withhold is now usedBegin deducting within 14 days or earlier if state requiresRemit payment within 7 days or earlier if state requiresState disbursement units are set up in all states-Except SC

http://www.acf.hhs.gov/programs/css/resource/state-disbursement-unit-sdu-contacts-and-program-information

May combine payments on one checkEFT may be required or available




Proper Source


A Notice of an Order to Withhold Income requires the sender to provide a copy of the underlying administrative or court order that contains a provision authorizing income withholding.

Non IV-D attorneys, individuals and private collection agencies must submit a copy of the underlying administrative or court order that contains a provision authorizing income withholding.

Income Withholding Order


An income withholding order may come from the employer’s state agency, directly from another state, court or private attorney. If from an out-of-state agency, it is called “direct income withholding” because it comes directly from an out-of-state agency to the employer rather than being processed through the child support enforcement agency in the employer’s state.

An Income or Withholding Order May Be


Judicial – originates in the court system and is ordered by a judge.

Administrative – originates through the child support enforcement agency’s “administrative process” in order to expedite case handling; is ordered by a child support hearing officer or equivalent, who has the same authority as a judge.

But It Will Be


A standardized form entitled “Order/Notice to Withhold Income for Child Support” (IWO) is now required for use in all states. This form includes information about the case (where the case is from, who the persons in the case are, and case-identifying information).


Rejecting a Form


Under the following circumstances, the IWO must be rejected and returned to sender:

IWO instructs the employer/income withholder to send a payment to an entity other than a State Disbursement Unit (e.g., payable to the custodial party, court, or attorney). Each State is required to operate a State Disbursement Unit (SDU), which is a centralized facility for collection and disbursement of child support payments. Exception: If this IWO is issued by a Court, Attorney, or Private Individual/Entity and the initial child support order was entered before January 1, 1994 or the order was issued by a Tribal CSE agency, the employer/income withholder must follow the payment instructions on the form.

Form does not contain all information necessary for the employer to comply with the withholding.

Form is altered or contains invalid information. Amount to withhold is not a dollar amount. Sender has not used the OMB-approved form for the IWO (effective July, 2014). A copy of the underlying order is required and not included.

Generally Follow the Issuing State For:


Duration and amount of child support, current and arrears,

Medical support terms, Where to remit payments, and Payment of fees and costs charged

(if any) by the child support enforcement agency, issuing court, or custodial party's attorney.

http://www.acf.hhs.gov/programs/css/resource/state-income-withholding-contacts-and-program-information




Follow the Principle Place of Employment For:


When to begin withholding, When to remit payments (1 to 7 days after payday), Mandatory deductions, Maximum amount to be withheld (within CCPA

limits), How to allocate withholding across multiple child

support orders, Administrative fee that employer is permitted to

charge, and Other terms and conditions that may be set by state

law.

What If You Get Two for One Child


Continue to honor the first order received. Give your employee a copy of the second order. Contact the issuing agency that sent the second

withholding order and inform it that you are already sending withheld payments for the same child to another jurisdiction. Provide payment information such as the amount of the withholding and where the withholding is being sent.

Contact the issuing agency that sent the first withholding order and inform it of the second order.

Multiple Income Withholding Orders Same Employee and Different Children


Federal regulations require that some money must be paid to each order for current support if there is more than one withholding order (for different situation of the same employee). In addition, states have enacted laws specifying the method for allocating money toward current support due for each order. Thus, some money must be allocated toward all current support orders. The orders should not be paid on a "first come, first served" basis.

Methods


Prorate by allocating a percentage to each order based on the total dollar amount of current support ordered, or

Share equally by dividing the allowable disposable income by the total number of orders.

Examples later on

Priority of Deduction for Child Support


Current Child and Spousal Support

Medical Support

Child Support Arrears

Medical Support Orders


Medical Support


National Medical Support Notice is a federal form requiring enforcement of a medical support order

– Part A – Notice to Withhold Health Care Coverage, Employer Response, and Instructions to Employer

– Part B – Medical Support Notice to Plan Administrator, Plan Administrator Response, and Instructions to Plan Administrator


Sections 1-6


Employer NMSN Requirements


NMSN does not need to be filed with the court Deliver copy of the NMSN to the employee within 10 days of receipt Begin coverage within 20 days of receipt of NMSN by sending Part B to

the plan administrator If coverage is not available, complete and sign the employer Response

Form and return to the appropriate agency within 20 days Current child support plus health insurance coverage must not exceed

50% of the employee’s disposable income. When this occurs, complete the Employer Response Form and send to the appropriate local child support agency within 20 days

Must notify if coverage ceases: Reason for the lapse Whether the lapse is temporary Date coverage is to resume

Let’s Do Some Child Support Examples


Calculation Example(State uses 50%)


Employee’s disposable income is $662.00Multiply by 50% x 50%Allowable Disposable Income $331.00

Employee has one current child support (CC/S) order for $200 and a health insurance premium of $125

So If We Do the Calculation


$200 CC/S + $125 health insurance premium = $325

Max. support deduction $331.00Obligation -$325.00We can take the entire obligation – no problems

Let’s add an arrearage to the equation (state allows only 50%)…


Here’s how we fix it…


Take the $200 CC/S and the $125 health insurance premium but only $6 partial arrears payment. That totals the maximum deduction allowed of $331.00

You can take more if the state law allows for arrearage percentage or has the higher federal limits

Same Disposable Income But…

©2015 The Payroll Advisor46

Order A $150 cc/s + $50 arrears = $200.00Order B $100 cc/s + $25 arrears = $125.00Order C $175 cc/s + $25 arrears = $200.00Totals $425 cc/s + $100 arrears = $525.00

We are over our maximum so the first to go is the arrears since current child support must be satisfied first

Here’s How It Is Done…47


Special Situations


Bankruptcy and Child Support


Even if an employee declares bankruptcy, he is still obligated to pay child support. Debts due for delinquent child support are not dischargeable in bankruptcy actions.

Several changes to the Bankruptcy law went into effect on October 17, 2005. One of the most significant changes related to child support is that the automatic stay provisions under the bankruptcy code no longer apply to the withholding of domestic support obligations from a noncustodial parent’s income or wages.

Lump Sum Payments


If the child support enforcement agency becomes aware that the noncustodial parent is or may be entitled to a “lump-sum payment” (bonus, severance pay, etc) a separate lump sum transaction may be sent to the employer in order to obtain part or all of the payment to apply to the noncustodial parent’s support obligations.

http://www.acf.hhs.gov/programs/css/resource/bonus-and-lump-sum-payments




OCSE Portal Lump Sum Reporting Process


Employer:• Provide information about employees who are eligible to receive

a lump sum payment using one of these methods: – Enter information about each employee into the fields on the Lump

Sum Reporting screen– Upload a Microsoft Excel spreadsheet (or similar format) to report

many employees at one time• After providing pending lump sum payment information, you will:

– Receive confirmation that the information was uploaded– Be able to review errors if the information was not uploaded– Correct the errors and resubmit files– View information you reported in the last 60 calendar days

Terminating Employees


Upon termination, mail or fax a completed "Termination Notification" form to the issuing agency, OR some states will accept this information over the telephone or online. The employer should have the following information available: Employee's name, Employee's case identifier, Last known home address, New employer's address (if known), and Date of separation.

Also report for Medical Support

eTerm


Electronic Termination (eTerm) allows employers to report employee terminations online. Registered employers provide information about employee terminations (or that an individual has never worked for them) either by uploading a file or entering information in the online eTerm application.

How Employers Can Participate Employers currently registered with the Lump Sum Reporting

application on OCSE’s Child Support Services Portal are automatically enrolled in eTerm.

Employers who are not registered for the Lump Sum Reporting application should contact the Employer Services Team at [email protected] for a brief demonstration of the application. Once the demonstration is completed, employers can register to use both the eTerm and Lump Sum Reporting applications by completing the Employer Services Agreement and Profile form.

mailto:[email protected]

http://www.acf.hhs.gov/programs/css/resource/employer-services-agreement-and-profile-form

Rehired Employees


If the employee is temporarily laid off (i.e., due to seasonal work), retain the income withholding order that was being honored prior to the termination. The amount of time that an income withholding order is kept on file following a termination varies from state to state. For example, some states require that an income withholding order be reactivated if the employee is rehired within 90 days.

If Your Employee is Called Up for Active Duty!


For those reservists who owe child support, it would be helpful if you would:

Contact the child support agency that issued the income withholding order

Tell them that your employee-reservist has been called up to military duty

Provide the date of activation. The child support agency can then issue a new income

withholding order to the military service branch. By providing this information, you are helping your

employee avoid lapses in payment to his or her children while serving our country.

E-IWO for Child Support


Office of Child Support Enforcement working with employers and states to automate the income withholding process with electronic income withholding orders or e-IWO

2 types of implementation options

E-IWO Options

Medium to large employer who has IT resources that can commit several months to programming

IWOs sent in flat file format or .XML document

You process and make appropriate updates to payroll system

Get PDF of IWO You create acknowledgement record

whether accepting or rejecting Takes 3-5 months to implement

Receive small number of IWOs or have no IT resources

Receive an image ready PDF copy of the IWO and a prefilled acknowledgment as an excel spreadsheet or PDF

Takes 2-4 weeks to implement Need to configure server and

directories so some IT support is still needed

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Option 1—System to System Option 2—No Programing Option (NPO)

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PDF Acknowledgement Sample

XLS Acknowledgment Sample

The Employer Can Also


Notify a state when an employee is terminated

Notify a state when an employee is going to receive a lump sum payment

Employer controls when the notices are released

Contact Bill Stuart for more information:

E-mail: [email protected]

Phone: 518-399-9241

mailto:[email protected]

FEDERAL TAX LEVIES


Federal Tax Levies


Form 668-W Notice of Levy on Wages, Salary and Other Income

Amount of deduction based on Publication 1494

Chart lists amount exempt from levy

Deduct from “take home pay”

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Form 668-W


Six part form (Part 6 retained by IRS)Part 1—Employer’s copyParts 2-5 Given to employeePart 2 & 5 – Employee’s copies to keepParts 3-5 require employee to complete information Part 3 and 4 are returned to employer within 3 days If not received use married filing separately plus one

personal exemptionDo not use Form W-4Use same chart even if year changes unless employee

submits new form

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Allowances On Part 3


Employee completes this partEmployee counts as one exemption

as wellYou may add the employee if they

fail to do so since you have the social security number

SSN must be there for all exemptions or they don’t count

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Answering Back


Form 668-W has a required response back from the employer

Send in with the first payment

Make copies for yourself for when employee terminates

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What is Meant by Take Home Pay


Subtract the following in calculating take home pay:TaxesVoluntary and involuntary deductions in effect before

the levy is receivedIncreases in preexisting deductions beyond the

employee’s controlCondition of employment deductions that come after

the levy is receivedDirect deposit is not counted

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Determining Amount Exempt from Levy


Publication 1494 is used to determine the amount exempt from levy

Changes each yearUse the exemptions and

filing status the employee submitted on the Form 668-W

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Federal Tax Levy Calculations

Employee Charlie receives $1,300 every two weeks. A tax levy of $15,000 is received. Charlie claims married filing jointly with 2 exemptions. He has the following deductions:

Fit $100.00SS $ 77.50Medicare $ 18.13SIT $ 40.00401(k) plan 3% $ 39.00Health Ins. $ 50.00Total $324.63

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ExampleCalculations

Tax Levy Would Calculate


Take Home Pay $975.37($1,300 - $324.63)

Exempt from Levy $792.31(From 2015 Chart)

Amount subject to levy $183.07($975.37 - $792.31)

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Stopping the Levy


Must receive Form 668-DIRS wants you to continue

to withhold until release is received even if it exceeds amount on levy

Call when you are getting close!

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Between Employees and the IRS

New at the IRS—online payments

Employee fills out application online

Makes payments online Must still get Form 668-D to

the employer Can encourage employees

to use

Form 2159 “Payroll Deduction Agreement”

Totally voluntary on both sides

Still need release form to stop original levy

Three-Part Form Can encourage employees

to file

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Online Payments Form 2159

Federal Agency Debt Collections, State Tax Levies, Creditor Garnishments, Voluntary Wage Assignments, Bankruptcies and Student Loans

OTHER GARNISHMENTS


Federal Agency Debt Collections


Fail to pay nontax debt such as vendor, federal retirement, federal salary and social security benefits

Subject to CCPA as well as Debt Collection Improvement Act of 1996Uses 15% of disposable and includes health insurance as

mandated deductionHas priority if served first over federal tax levy but not

child supportBegin when it says and end when release is received

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State Tax Levies


CCPA limits do not apply to state tax levies under 15 USC 1673(b)(1)(c)

COULD BE 25% of disposable or the amount that exceeds 30 times the federal minimum hourly wage

COULD BE anything they want it to be—Example KY allows employee to keep $125/week Plus $60 for each dependent

COULD come on a tax levy form or COULD be a letter

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State Tax Levies


Disposable income could match federal or may not even give a definition

May have priority over other creditor garnishments or it may not

Answer back may or may not be required

May be able to collect a feeRead the garnishment carefully

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Creditor Garnishment Calculation


Tony has a creditor garnishment of $1,000 to honor and has $700 in disposable income and is paid biweekly:

Creditor Garnishment Calculation


Step 1: Check the chart

Step 2: Determine the lesser of disposable income minus 30 times federal minimum wage or 25% of disposable income: Disposable income minus 30 times minimum wage:

$700 - $217.50 = $482.50 25% of disposable income: 25% x $700 = $175

$175.00 is the lesser of these two amounts. We can take the $175 to satisfy the garnishment

But What if There’s a Child Support Order?


Tony's child support withholding obligation is 180.00/week. Deduct $180 for child support from Tony's $700 payDifference between allowed amount for garnishment and the child support deduction taken: $175 - $180 = -$5The child support deduction of $180 has already exceeded the allowed amount for garnishment; therefore nothing may be withheld for Tony's creditor garnishment.

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Let’s Do One Where He Has the Money


Tony's child support withholding obligation is $140/week. His weekly disposable income is $1,000. Deduct $140 for child support from Tony's $1,000 pay Determine the lesser of:

Disposable income minus 30 times minimum wage:$1000 - $217.50 = $782.50

25% of disposable income: 25% x $1000 = $250$250 is the lesser of these two amounts.

Difference between allowed amount for garnishment and the child support deduction taken:$250 - $140 = $110

$110 can be withheld for Tony's creditor garnishment79

State Limits


State(s) RequirementDE, 15% of wagesIL 15% of gross wages or amount which disposable earnings exceed 45 times of the higher of federal or state

minimum wage

WI 20% of disposable earningsAL, AZ, CA, CO, DC, GA, ID, IN, KS, KY, LA, MD, MS, MO, MT, NE, NY, OH, OK, OR, SC, TN, UT, VT, WY

Lesser of 25% of disposable or amount exceeds 30 times federal minimum wage

WALesser of 25% of disposable or amount exceeds 35 times federal minimum wage

CT, IA, ME, MN, NM, ND, VA, Lesser of 25% of disposable or amount exceeds 40 times the higher of federal or state minimum wage

NV, NH, Lesser of 25% of disposable or amount exceeds 50 times the higher of federal or state minimum wage

WV, Lesser of 20% of disposable or amount exceeds 30 times federal minimum wag

SD, Lesser of 20% of disposable or amount exceeds 40 times federal minimum wag

AK, FL, HI, States limits within code based on dollar amountsAR, MI, NC, No limits set in codeMA, $125 exempt from levy each pay periodNJ $48 per week are exempt; 10% if wages exceed $7,500 per yearPA, TX Not permitted except in certain circumstancesRI Up to $50 are exempt from attachment

More State Examples


Alaska: Notwithstanding the increased exemption amounts provided for weekly disposable earnings and cash and other liquid assets, the exemption for weekly disposable earnings is $743 and the maximum monthly exemption for cash and other liquid assets is $2,970

Florida: up to $750 per week of the disposable earnings of a head of family are exempt from attachment or garnishment. Disposable earnings greater than $750 a week cannot be attached or garnished unless the employee agrees in writing;

Hawaii: The maximum that employers can withhold is 5 percent of the first $100 of disposable wages per month, 10 percent of the next $100 per month, and 20 percent of all sums in excess of $200 per month. Disposable earnings are the amount of earnings remaining after the deduction of any amount required by law.

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However, In North Carolina…


The courts of North Carolina are not permitted to order an employer to withhold wages for other types of debts such as car loans, credit card debt, and other personal debt items. While the North Carolina courts are not permitted to garnish wages based on these debts, creditors in other states may be able to get an order of garnishment under their own states’ laws. It is not a violation of the North Carolina Wage and Hour Act for an employer to withhold an employee’s wages if required to do so by law. If a court from another state issues a valid order under that state’s laws requiring an employer to withhold a North Carolina employee’s wages for payment of a debt, the employer does not violate the North Carolina Wage and Hour Act by obeying that order.

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State Fees


Collection of a fee for the employer is sometimes permitted—states with no provisions to collect fees include: AL, AK, CO, CT, DE, HI, ID, KY, MD, MA, MS, MT, NE, NM, NY, OH, SC, VT,

WV, WYSome states have special provisions for fees such as: IA only permits witness fees NH only permits for collection of overpayment of SUI benefits NC permits only for debts to public hospitals or public assistance

payments PA for collection of taxes only TN permits for public employers only May also be a fee to collect for the state or court or plaintiff in the

case…Read the garnishment

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State Fees


State Fees Permitted

Arizona $5 each pay period from nonexempt earningsArkansas $2.50 per pay periodCalifornia $1.50 for each payment District of Columbia $2.00 for withholding order

Florida $5.00 for 1st deduction, $2.00 each deduction thereafterGeorgia $50 or 10% of amount paid into court (whichever is greater) but not to exceed $100 as reasonable attorney’s fees or expenses

Illinois 2% of amount to be deductedIndiana Larger of $12 or 3% of total amount to be deducted ½ of fee from employee, ½ of fee from amount due creditor

Kansas $10 for each 30-day periodLouisiana $3 from nonexempt income each payment garnishment is in effectMaine $1 per check issued and forwarded to creditorMichigan $6 fee paid by plaintiff at the time a writ of garnishment is servedMinnesota $15 paid by creditor to employer at time of service of garnishmentMissouri Greater of $8 or 2% of amount withheld. Taken from employee’s wagesNevada $5 paid by creditor to employer at time a writ of garnishment is served. Employer entitled to$3 per pay period not to exceed $12 per month

New Jersey 5% for compensation towards expenses and services in processing each payment

North Dakota $10 paid by creditor when employer is served with garnishment summonsOklahoma $10 from employee’s funds for answering a garnishment summonsOregon $2 processing fee for each week a payment is made unless withholding reduces below minimums. Must collect after last payment is made Rhode Island $5 paid by employee for each writ of garnishmentSouth Dakota $15 for garnishee summons being servedTexas Lessor of actual costs or $10 from disposable earningsUtah $10 for a single garnishment or $25 for continuing garnishment paid by creditor directly to employer

Virginia $10 for each garnishment summons servedWashington $10 processing fee for 1st disbursement and $1 for each subsequent disbursement. $20 for first payment; if continuing lien $10 at time of second

payment

Wisconsin $15 garnishee fee from creditor for each garnishment or extension

Voluntary Wage Assignment


Are not the same thing as a court-ordered garnishment

Are voluntary so not covered under CCPA limitsCan be revoked at any time by employee so watch

for thisState sets the limit and the rulesState can forbid employer to honor, especially for

“small loans”

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Bankruptcy


Governed by the federal Bankruptcy ActChapter XIII bankruptcy orders take priority over any

other claim against wages including child support and tax levies

Should be included in bankruptcy—verify Get releases when required—child supportNotify courts if child support is involved-No more

automatic stays for child support

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Student Loans


Higher Education Act amended to allow for garnishment of wages to repay student loans

15% of disposable or 30 times federal minimum wage which ever is less

Multiples can use the 25% garnishment limitDisposable pay is the same under CCPA except

mandated deductions include health insurance

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But They Do Not Include…


A Wage Garnishment Worksheet is included with the Wage Garnishment Order to assist payroll in calculating disposable pay and the wage garnishment amount.

Also website http://fmsq.treas.gov/debt/AWG_calc.html

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http://fmsq.treas.gov/debt/AWG_calc.html




Handling a Student Loan Garnishment


ED first notifies the employer that debtor pay must be withheld by sending a Wage Garnishment Order (SF-329B) form

Provides the debtor’s name, address, and social security number as well as instructions for withholding.

The employer then: completes and returns the Employer Certification (ED-329D) within 20 days of receipt

Begins withholding the amount directed in the order—usually within 10 days

Remit within 3 days after withholding

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But What if the Employee is Gone?


If the debtor is no longer employed by your organization when you receive the Order, simply indicate this on the form and return it to ED or call the Administrative Wage Garnishment Branch at 404-562-6013.

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X

Complete here

Complete here Complete here

Then Each Quarter…


ED will send the employer an Employment Confirmation Report to obtain any information needed regarding any changes to the employment status of the debtor. The Report lists the debtor/employee's account balance. Keep in mind that the balance shown on the Report reflects interest that has accrued since the Order was issued. In addition, ED has used part of the amounts withheld and paid to ED to defray collection costs ED incurs in collecting the debt.Questions or account balance call (404) 562 -6013.

Are There Any Questions?


Documents

22nd Annual Illinois Statewide APA Conference 08/13/2015 and 08/14/2015 Lombard, IL What Payroll Needs to Know About Garnishments So You Don’t Miss the