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5 Ways Payroll Software Can Help You Stay Compliant with Wage Garnishments

Jerika Holton
Aug 22, 2023
10 min

Table of Contents:

Leverage Your Payroll Software For Effective Garnishment Management

The payroll department stands at the forefront when it comes to managing employee garnishments. As such, it is vital that you remain abreast of the ever-evolving garnishment laws and stay in line with court orders. Utilizing your payroll software to its full potential can streamline this complex process, reinforcing both compliance and efficiency.

Garnishment Expertise with Greenshades

With compliance as our driving principle, Greenshades payroll platform supports unlimited garnishments at no charge. Our payroll platform seamlessly handles employees with multiple types of garnishment orders, whether it's child support, an IRS tax levy, student loans, or others. These deductions are prioritized and executed in accordance with applicable federal and state guidelines, ensuring your team remains both compliant and assured in their tasks.

Enjoy the flexibility of integrating garnishments into your regular pay runs while maintaining standard garnishment rules for future cycles, ensuring compliance The capability to modify or remove garnishment codes also means you're equipped to deal with complex scenarios. This includes those that require settling any additional arrerage resulting from previously underpaid garnishments.

Here are 5 ways Greenshades payroll software can help with managing garnishments:

1. Garnishment Compliance

Greenshades payroll software facilitates adherence to court orders and relevant laws when processing garnishment orders. Rather than investing hours in manual calculation of complex withholdings, the software automatically determines the exact amount to be deducted from the employee's paycheck in accordance with court instructions inputted in the system. Additionally, you can rest assured knowing that Greenshades system stays in sync with any changes in garnishment laws and regulations, helping maintain compliance with the most current legal standards.

To assure employees still receive compensation, it is critical your payroll software understands Title III of the Consumer Credit Protection Act. Title III limits the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings (the amount left after legal garnishments are withheld) are greater than 30 times the Federal minimum hourly wage (set at 7.25 an hour). This limit applies no matter how many garnishments orders an employer receives. Failure to stay compliant may result in reinstatement of a discharged employee, payment of back wages, and restoration of improperly garnished amounts.

2. Withholding and Remittance

In addition to ensuring precise withholding calculations, your payroll provider is also responsible for remitting the withheld funds to the designated recipient, often a creditor or government agency. In the event an employee faces multiple garnishment orders, such as paying off student loans and child support simultaneously, the payroll department must prioritize and allocate the deductions while adhering to the applicable laws governing the order of priority.

3. Recordkeeping

With the help of cloud-based software, your team can maintain payroll records securely in the cloud. The cloud stores detailed documentation of the entire garnishment process, including the start date, individual paycheck deductions, and the total amount remitted to the creditor. Should any discrepancies arise, your employees can readily access comprehensive insights into their payments.

By storing this information in the cloud, the garnishment details are exclusively accessible to authorized personnel involved in the process or as mandated by law, helping to safeguard sensitive data, and maintain strict confidentiality protocols.

4. Communication

Maintaining open communication with employees regarding the garnishment process ensures they are well-informed about the deductions and the reasons behind wage withholding. Clear and transparent communication from your payroll department is vital to prevent any confusion or misunderstandings with garnishment withholdings. Additionally, the implementation of self-service technology along with payroll software enables employees to access clear insights into their garnishment deductions conveniently, from any device and location, enhancing their understanding and facilitating ease of access.

5. Timely Processing

Greenshades payroll software doesn't just automate the garnishment process. It also provides your team with valuable insights to accurately manage wage withholdings, while facilitating compliance with relevant laws. Coupled with its ability to adapt to changes in regulations, it becomes an invaluable tool for maintaining consistency and accuracy in garnishment calculations.

Choosing the Ideal Payroll Software for Your Needs

Keep in mind that wage garnishments can be multifaceted, covering various types of debts including child support, taxes, or other court-ordered payments. As such, it's essential to have a payroll software that assists your team in efficiently managing payment schedules, issuing precise withholding amounts, and aligning with current garnishment laws. Providers like Greenshades aid in maintaining continuous compliance for both your team and employees, helping you sidestep expensive fees and penalties.

For more information on Greenshades’ garnishment process contact us today to explore how our payroll software can provide the support and compliance expertise necessary for the success of your business.

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