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From the APA: Help Avoid Garnishment Errors
with One Extra Step


By Larry White, CPP
Director of Payroll Training
American Payroll Association

It’s the last thing you want to do.

You’re in payroll. You’re supposed to pay employees. But now you find yourself taking money away from them. The last thing you want to do is to take more than you’re legally allowed, potentially exposing your company to a lawsuit.

The answer is to execute garnishment audits prior to every payroll run.Involuntary deductions, or garnishments, are the bane of the payroll industry. Our government has placed the burden of the collection process squarely on the shoulders of employers with the threat of fines if it’s not done right. So what can your payroll department do to help accomplish this antithesis of its own existence and not unnecessarily expose the company to lawsuits and fines?

Why is that important? Because of the fluctuating nature of disposable earnings and other factors involved in calculating garnishment deductions, the amount you deducted last pay day may not be the same amount you have to deduct this pay day. And if you deduct more than the limits allow – that’s potentially taking money illegally from your employees.

Auditing is easier than it may sound. After your preliminary payroll run, check each employee who has any type of garnishment (child support order, tax levy, writ of execution, etc.) to confirm that the proposed deduction doesn’t exceed the limits of the law. Then make any required adjustments to the deduction before finalizing the payroll run. In addition, if your payroll system includes state withholding requirements, it is critical to review them and confirm they reflect any recent changes states may have made.

It takes a little extra time but it is the prudent thing to do. The effort is worth it in order to help avoid deducting more from an employee’s paycheck than you’re legally allowed, which could potentially expose your company to a lawsuit.

For more information and education about garnishments from the American Payroll Association, register and reserve your spot at the Garnishments Forum in a city near you, or a live webinar.


About the Author

Larry White, CPP is the Director of Payroll Training for the American Payroll Association. His responsibilities include the presentation, development, and review of APA training courses and he also travels the country sharing payroll information with payroll professionals to assist in helping to keep their companies in compliance with government regulations.


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