What are Wage Garnishments?

When an individual owes money to a creditor and fails to repay it, the creditor may seek legal recourse by having money deducted from their paycheck. This process involves obtaining a court order to collect a portion of the debtor’s earnings directly from their employer.

HR and payroll professionals are responsible for executing wage garnishments, which can include:

• Verifying the employee’s information, the debt type (child support, taxes, etc.), the mandated withholding amount (percentage or fixed sum), limitations on how much can be garnished (based on federal and state laws), and instructions for sending the withheld funds (payment address and deadlines).
• Understanding how much can be garnished from an employee’s paycheck per both state and federal laws, then ensuring compliance.
• Calculating the exact amount to be withheld from the employee’s paycheck, which may involve deductions for essential expenses to determine disposable income. The order should specify the maximum allowable withholding.
• Making adjustments to deduct the money from each check and sending it to the creditor or agency collecting the debt according to the instructions on the order within a designated timeframe.
• Keeping accurate records of the process and each transaction, including copies of court orders, all calculations performed to determine the withheld amount, and detailed records of payments made to the creditor. This documentation serves as proof of compliance in case of audits or disputes.
• Terminating wage garnishments when the debt is paid in full or the court ends its order.

What is Wage Garnishment Processing Software?

Wage garnishment software provides specialized tools designed to simplify and streamline this process through automation, such as calculating the amount to withhold based on the debtor’s income and the legal limits set by state and federal laws. It also generates necessary documentation, including notices to the employee and the employer, as well as payment schedules.

By automating these tasks, wage garnishment software helps payroll teams ensure compliance with complex laws and regulations while reducing the risk of errors or oversights that could result in legal consequences. It also saves time and resources that would otherwise be spent on manual calculations and paperwork.

Axiom’s wage garnishment solutions are powered by UKG Ready Payroll, one of the leading human capital management software platforms on the market. We’ll work directly with your team to build a solution that integrates your existing payroll systems, delivers seamless communication between departments, and ensures the garnishment process is executed accurately and efficiently.

Does Wage Garnishment Processing Software Work?

Wage garnishment software provides a reliable and efficient means for managing the complexities of the garnishment process while minimizing administrative burdens for businesses and employers.

Axiom’s wage garnishment software simplifies the entire process, from receiving court orders to ensuring accurate deductions and clear communication.

Calculation and Withholding

One of the biggest advantages of Axiom’s wage garnishment software is its ability to automatically handle calculations. The system takes the verified data and considers both the information you entered about the order and the legal limits set by federal and state laws regarding wage garnishment.

From there, the software calculates the exact amount that can be legally withheld from the employee’s paycheck, ensuring both accuracy and compliance.

Reporting and Communication

Axiom’s software can generate detailed garnishment reports that benefit both employers and employees. They typically include information like order details, calculated withholding amount, and garnishment history.

Employers can use these detailed reports for record-keeping purposes and to answer any questions employees may have. For employees, the reports offer transparency and allow them to track the progress of the garnishment. 

The Benefits of Using Wage Garnishment Software

Enhanced Efficiency

• Automation: Manual tasks like data entry, calculations, and withholding deductions can be automated, freeing up HR and payroll personnel to focus on other priorities.
• Streamlined Workflows: Establish a clear and consistent process for handling garnishments from start to finish, reducing confusion and ensuring timely processing.
• Integration with Payroll: Wage garnishment functionality can often be integrated with your existing payroll software, eliminating the need for duplicate data entry and simplifying the overall payroll process.
• Reduced Employee Relations Issues: By handling garnishments efficiently and transparently, the software can minimize employee confusion and frustration related to wage deductions.

Reduced Risk and Improved Accuracy

• Compliance Guardrails: Wage garnishment processing software helps employers comply with federal and state laws, such as adhering to deduction limits and following proper notification procedures.
• Reduced Errors: Manual calculations and data entry are prone to errors. By automating these tasks, you minimize the risk of mistakes that could result in penalties or legal action.
• Audit Trail and Recordkeeping: Maintain a detailed record of all garnishment orders processed, calculations made, and deductions withheld. This documentation is crucial for audits and demonstrates compliance efforts.
• Security: Wage garnishment software is designed to handle sensitive employee data securely. This protects both the company and employees from potential data breaches.

Improved Communication and Management

• Prioritization and Tracking: Prioritize garnishments based on legal requirements and track multiple garnishments for a single employee, ensuring proper order of deductions and adherence to all legal limits.
• Automated Reporting: Get reports on active garnishments so you can monitor the process and identify any potential issues.
• Pre-Populated Forms and Communication Tools: Generate pre-populated responses to courts or creditors and facilitate electronic communication, saving time and resources.

Simplify Wage Garnishment Processing With Axiom

Axiom Human Resources specializes in providing comprehensive human capital management solutions tailored to the unique needs of businesses across a variety of industries. Our wage garnishment software is designed to meet your individual needs, as well as streamline processes, reduce administrative burdens, and ensure consistency in data management across various platforms.

Contact our team today to see how our software can help your company simplify wage garnishment. Then discover how our other solutions can take some of the heavy lifting off your payroll team:

• Compensation Analysis
• Payroll Reconciliation
• Tax Management
• Worker’s Compensation