Defining U.S. garnishment rules

Garnishment rules determine how Payroll calculates:

the portion of employee pay that is exempt from garnishments
the garnishment amount
garnishment fees
multiple garnishments

Before you define U.S. garnishment rules, you must define any of the garnishment types you need that are not part of the standard Lawson delivery. If the garnishment rules include fees, you must define a garnishment deduction code for the fee. Related reports and inquiries

Define U.S. garnishment rules

Access United States Garnishments Rules (PR25.2).
Define garnishment rule components. Specify this information:

Governing Tax Authority

The tax authority (state, county, or other locality) governing the garnishment. The tax authority determines the rules that apply to a type of garnishment.

Category

The category of the garnishment. If you set up rules for a garnishment category, the rules apply to all types associated with the category unless a rule is defined for a specific category and a specific type.

Note: Federal rules are defined by category.

Type

The type of garnishment.

Note: If you do not select a type, the type defaults depending on the category you selected.

Multiple Garnishment Rule

The value that indicates how the system should distribute the amount withheld when the amount is insufficient to cover multiple garnishment orders for the same category.
Define the variables of the formula used to determine wages exempt from garnishment. Specify this information:

Formula

The formula Payroll uses to calculate exempt wages.

Rate

If the formula uses a rate, select the rate that, when multiplied by the federal minimum wage, determines exempt wages for the employee.

Factor (1-4)

If the formula uses factors, type a wage formula factor that Payroll uses to calculate exempt wages.

Second Family, Yes

If the formula considers second families, type the percent Payroll uses to calculate exempt wages if an employee has a second family.

Second Family, No

If the formula considers second families, type the percent Payroll uses to calculate exempt wages if an employee does NOT have a second family.

Addl Pct or Arrears over 12 weeks (Additional Percent or Arrears Over 12 Weeks)

If the garnishment is for child support or alimony, type the additional percentage that Payroll uses to calculate exempt wages if arrears are over 12 weeks old.

Payroll uses this percent if Yes is selected in the Over 12 Weeks field of Employee Garnishment (PR26.1).

Per Dependent, Calculation Type

If the formula considers dependents, type the amount or percent per dependent that Payroll uses to calculate exempt wages.
Define wages used to calculate exempt wages on the Disposable Income tab.
Define any fees included in the garnishment on the Fees tab. Specify this information:

Deduction

Select a deduction code to use to track fee amounts withheld separately from the garnishment amount. On Deduction (PR05.1), you can only use deduction codes that have Yes in the Garnishment field.

Note: Once you add this rule, the fee deduction cannot be changed. To change a fee deduction for an existing rule, you must delete the rule and then add it with a new deduction code.

Amount

Type the amount to be deducted from the employee's earnings for this garnishment fee. If this field and the Amount field are left blank, the Limit Option along with Limit Amount 1 and Limit Amount 2, if applicable, determine the amount to be withheld.

Note: If this amount is changed, Deduction and Garn Fee Update (PR115) updates employee deduction master records with the new amount (unless the amount was overridden at the employee level).

Deduct from Garn

Note: This field applies only to the fee deduction, not the Clearinghouse Fee deduction.

Select whether the fee should reduce the amount taken for the garnishment amount if taking the full garnishment deduction and the fee would bring the employee net pay below the protection provided by law. The decision to deduct this deduction from the garnishment can be overridden on United States Employee Garnishment (PR26.1).

Apply Fee

Select if you want to apply the fee only when the garnishment amount is actually withheld or apply the fee every payroll cycle in which the garnishment amount should be withheld (regardless of whether funds exist to cover the garnishment order plus fees).

Limit Option

Select which limit option should be used to determine the fee amount. Use this field in combination with the Limit Amount 1 field and, if applicable, the Limit Amount 2 field.

Limit Amount 1

Type a limit amount or percentage to be used in fees calculation (based on the value in the Limit Option field).

Limit Amount 2

If the Limit Option rule has two calculations, type the second limit amount or percentage to be used in fees calculation.

Accrual Account

Select the distribution company for the accrual account on the fees deduction.

Clearinghouse Fee Deduction

If a clearinghouse fee should be calculated, select a deduction code from Deduction (PR05.1).

Clearinghouse fee deductions will only be taken from the income available to garnish, always preserving the employee's protected income. Partial Clearinghouse Fee deductions can be taken based on the arrears flag on the deduction, but will never go into arrears, no matter what the arrears flag is set to on the deduction.

Clearinghouse fee deductions do not display as a separate deduction on Earnings and Deductions Calculation (PR140), Payroll Register (PR141), or Gross Up Calculation (PR189). The amount deducted will always be included in the deduction amount shown on these reports.

Clearinghouse Fee Deductions will show separately on the garnishment reports produced by these programs. Clearinghouse fee deductions do not display on Employee Deduction (PR14.1) or Deduction Speed Entry (PR15.1) because the clearinghouse fee deduction is tied to the garnishment deduction.

Clearinghouse Fee

If you select a Clearinghouse Fee Deduction code, you can optionally supply an amount to override the amount defined on the deduction. Any amount supplied on the deduction or on the rule may be overridden on PR26.1. If no amount is supplied to override at this level or United States Employee Garnishment (PR26.1), the amount defined on the deduction is the amount that will be used to calculate this fee.