Garnishments are amounts that are automatically deducted from employee paychecks to pay for outstanding debts to government, and state agencies, and sometimes private organizations.
Examples of unpaid debts that can be collected through garnishments include:
Federal and State tax agencies will levy employee wages for unpaid and outstanding tax debts, e.g., from a failure to file a return or correctly report income on a return.
In general, private creditors (e.g., those seeking to recover unpaid credit card or medical bills) must sue for the right to request a garnishment order. Alimony payments cannot be garnished without a court order.
However, some types of garnishments do not need a court order:
You may contest the terms of a garnishment order, e.g., to provide proof that the amount of garnishment is too great, but cannot refuse to honor a garnishment order or tax levy.
Here's a list of garnishments that can be added to individual employees in Zenefits Payroll.
If an employee has multiple garnishments, the garnishments are prioritized by category. Make sure to pick the correct category when adding a garnishment so that Zenefits Payroll correctly prioritizes each garnishment.
For garnishment purposes, exempt wages are equivalent to the amount earned in a week by an employee who is paid minimum wage. They're "exempt" because they are the portion of an employee's disposable income that is excluded from garnishments so that no matter how much an employee's garnishments are, they can still take home at least minimum wage.
The exempt wages set by each state are usually provided as weekly amounts, which is convenient for employees who are paid each week. Here's how to calculate the exempt wages for employees paid by other schedules:
Levies are a type of garnishment that usually refer specifically to unpaid taxes. A tax levy grants the IRS permission to seize property and wages to satisfy a debt.
At this time, Zenefits can remit select garnishments to select agencies. To learn more about your company's eligibility for this, please contact Zenefits Customer Care.
To see if Zenefits will be remitting child support garnishments for your worker, take the following steps:
Administrators can reduce the disposable income for a worker's garnishment by selecting allowable worker deductions. These deductions will be taken from a worker's pay first, before any garnishments are calculated.
Please note that disposable income calculations will vary by the individual's work state.
The Federal Consumer Credit Protection Act, or CCPA, governs the amounts allowed based on the state regulations of the employee's principal work location. Typically, each court order for child support will cite the applicable state regulations.
The combined support amount and fee may not exceed the limit indicated. For more information on each state's limits, visit this page.
Zenefits offers two types of processing to allocate disposable income to multiple child support orders:
This is available for those on the Zenefits Payroll Garnishments new release
To audit the garnishments you have in Zenefits Payroll, you're able to download the Garnishment Audit Report to view calculations and uncollected amounts, even while the pay run is in a Draft status.
To run a report on all employees who have garnishments set up, you can run the Garnishments Setup Report.
Both of these reports are available under the Reports tab from your Payroll app.
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