Dayforce lets you configure, manage, and deduct garnishments from payments made to employees in the Payroll feature. Garnishments are also known as arrestments, and can include attachments-of-earnings in some countries, such as the Republic of Ireland or the UK.
Garnishments are used to collect money owed by employees to creditors when a federal, state, or provincial court or agency orders that these payments be made from an employee's pay. When a court or agency requests a garnishment of an employee's pay, employers are required by law to deduct and remit the requested amount.
For example, an employee's pay might need to be garnished when:
- An employee's creditor wins a judgment in court to deduct the amount of a claim and the costs of a lawsuit from the employee's pay.
- An employee fails to make family support, alimony, or tax payments.
To configure the application to garnish an employee's pay, you must first configure the required third-party payee, then create the garnishment record for the employee.
You can review system payees and add custom payees in the Payees tab of Payroll Setup > Third Party Payees. Certain payees, such as for family support, are already configured in the application. The Payment Method section of the payee details indicates how the payment is made to the payee. See Third Party Payee Configuration.
After you have created the necessary third-party payee, you must create the garnishment record for the employee in the Payroll > Garnishments screen of People. See The People Feature.
Although the general process for creating a garnishment (or an arrestment or an attachment of earnings) in the application is similar for Australia, Canada, the Republic of Ireland, the UK, and the USA, each requires different details. For information about country-specific requirements, see the following topics:
- Garnishments in Australian Payroll
- Garnishments in Canadian Payroll
- Attachments of Earnings in Ireland Payroll
- Arrestments in UK Payroll
- Garnishments in US Payroll
After you add a garnishment, the application automatically calculates it on payments for the employee in the Payroll feature, based on the configuration of the garnishment.
You do not need to add the garnishment to the employee's payroll elections.
It is possible for the application to generate a partial garnishment deduction or zero deduction amount. This can depend on the amount of the employee's pay that is considered disposable income, which is the amount of pay that is subject to being garnished. The earnings and deductions that are included in the calculation of disposable income depend on the garnishment jurisdiction and type.
The amount that the application can garnish can also be subject to jurisdictional rules or limits that are in place to protect a portion of an employee's pay from being garnished.
Garnishments are included as post-tax deductions in employee earning statements, in the Payroll Register and Payroll Summary reports, and in the Preview tab in Payroll > Pay Run Management. The following is an example of the Support type garnishment in an employee's earning statement:
You can create manual entries (for example, quick entries) in Payroll to add to, subtract from, or replace regular garnishment deductions. For example, you might need to reduce a garnishment deduction for one particular payment. You can only create manual entries for garnishments that have been entered in the employee's profile in the People feature in the Payroll > Garnishments screen. See Garnishment Entries in the Payroll Feature.
Dayforce provides you with the Garnishment History Report, which is a fixed format report in Payroll that you can use to track details such as garnishment parameters, order details, deduction results, and totals.