Multiple Garnishments

The Consumer Credit Protection Act’s (CCPA) Title 3 describes the rules around involuntary deductions of an employee’s salary for child and/or spouse support, support arrears, tax levies, and bankruptcy court payments. The federal government limits an employee’s support withholding to 50% of the employee’s disposable wages for a single support order and 60% for multiple support orders. Non-support orders are limited in any pay period to the lesser of 25% of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage prescribed by Section 6(a)(1) of the Fair Labor Standards Act of 1938. This limit applies regardless of how many garnishment orders an employer receives. The federal minimum wage is $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Support garnishments should be processed first but the deduction should factor into the limit of the non-support processing.

Advantage HRM provides the capability to correctly process multiple garnishments for an employee. The system assigns the proper amounts to various garnishment orders based on legal requirements and state or agency regulations when the total of all the garnishment order amounts exceeds the maximum allowed deduction for the employee. In addition, the system automatically assesses a processing fee for specific garnishments being processed.

Multiple Garnishments Processing

In order to support multiple garnishment processing for a single employee for the same type or different types, the Garnishment (GAR) and Hawaii Garnishment (HIGR) special deduction routines are used to review an employee’s support garnishments, apply the appropriate prioritization and divide the wages based on site-wide rules when orders exceed the allowed withholding. In addition, The Child Support (CSUP) and California Child Support (CACS) special routines are used to review an employee’s support garnishments and define the threshold based on the number of support orders.

Setting Up Multiple Garnishments

In order to process Multiple Garnishments, the following setup requirements must be met:

In order to calculate multiple garnishments accurately, employees with multiple appointments must be assigned to the same payroll number. In addition, the COMBINE CHECK OPTION on the Site Specific Parameters (SPAR) page must be set to Yes.
Garnishment deductions must be established at the Employee Level as opposed to the Appointment Level.
Deductions required by law (Social Security, Medicare, Fed Tax, etc.) must be established with a lower Deduction Processing Order Number than Involuntary Deductions (Bankruptcy, Tax Levies, etc.).
The Deduction Acceptance Priority Number of the Administrative Fee established using the Secondary Deduction Type and Secondary Deduction Plan on the Deduction Plan (DPLN) page should be lower than the associated garnishment.

Site Specific Parameters (SPAR) Setup

In order to support multiple garnishment processing, the following SPAR entries must be setup:

MULTI GARN ALLOCATION RULE - stores the site-wide rule for allocation when an employee has multiple garnishments with the same priority. The Text Value field contains either a P for percentage allocation or an E for equal allocation.
MINIMUM PROTECTED WAGE AMT - stores the information needed to calculate the minimum protected wage amount for garnishment processing. The Numeric Value field contains the minimum wage amount to be used in the calculation.
MINIMUM PROTECTED MULTIPLIER - stores the information needed to calculate the minimum protected wage amount for garnishment processing. The Numeric Value field contains the multiplier amount to be used in the calculation.
MULTI CHILD SUPPORT PERCENT - stores the percentage of disposable wages that may be withheld to satisfy multiple child support orders. The Numeric Value field contains the percentage of disposable wages that may be withheld for an employee with multiple child support garnishments. (For example, 0.60 = 60%)
INVOLUNTARY GARNISH PERCENT - stores the percentage of disposable wages that may be withheld to satisfy non support garnishments. The Numeric Value field contains the percentage of disposable wages that may be withheld for an employee’s non-support garnishments. (For example, 0.25 = 25%)
COMBINE CHECK OPTION - Yes/No Flag must be set to Yes.

Site Specific Parameter Processing

The deduction processor first reviews the SPAR entries listed above in order to identify values necessary for garnishment processing. The MINIMUM PROTECTED WAGE AMT and MINIMUM PROTECTED MULTIPLIER SPAR page entries are reviewed to retrieve the minimum wage amount and multiplier from the Numeric Value fields. Once the program has both amounts they are multiplied and stored as the Minimum Protected Wage Amount.

The MULTI GARN ALLOCATION RULE SPAR page entry is read to determine how to pay garnishments if they have the same Deduction Processing Order Number and there is not enough money to cover all the garnishments. If the Text Value field contains a P, payments are made on a percentage basis. If the Text Value field contains an E, payments are made on an equal allocation basis.

Finally, the INVOLUNTARY GARNISH PERCENT SPAR entry is read in order to identify the threshold for involuntary non-support garnishments.

Once all the SPAR entries have been retrieved by the special routines, the following calculations are performed:

Single Support Max Amount = number entered in the Numeric Value field from the SINGLE CHILD SUPPORT PERCENT SPAR entry * Employee’s Disposable Wages.
Multi Support Max Amount = number entered in the Numeric Value field from the MULTI CHILD SUPPORT PERCENT SPAR entry * Employee’s Disposable Wages.
Minimum Protected Wage Amount = Minimum Wage Amount from the Numeric Value field of the MINIMUM PROTECTED WAGE AMT SPAR entry * Multiplier from the Numeric Value field of the MINIMUM PROTECTED MULTIPLIER SPAR entry.
Amount Available for Garnishment = Employee’s Disposable Wages - Minimum Protected Wages calculated above.
Max Non-Support Garnishment Amount = Percent from the Numeric Value field from the INVOLUNTARY GARNISH PERCENT SPAR entry * Employee’s Disposable Wages.

Additional setup for Administrative Fee

In addition to multiple garnishments processing, an automated administrative fee process is performed for the GAR and CSUP special routines. The administrative fee is defined as an additional flat rate amount deduction type and plan. The deduction is tied to support and non-support garnishments utilizing the Secondary Deduction Type and Secondary Deduction Plan fields on the Deduction Plan (DPLN) page.

Secondary Deduction Type - This is an optional field for the Garnishment (GAR) and Child Support (CSUP) routines. The appropriate deduction type for an administrative fee should be entered here if an administrative fee should be assessed for the processing of the specific garnishment.
Secondary Deduction Plan - This is an optional field for the Garnishment (GAR) and Child Support (CSUP) routines. The appropriate deduction plan for an administrative fee should be entered here if an administrative fee needs to be assessed for the processing of the specific garnishment.