Garnishments for Canadian employees are created and managed in the Payroll > Garnishments screen of the employee's record in the People feature. See The People Feature.
Before You Begin: While the basic process for creating garnishments is similar for different countries, garnishments for Canadian employees require specific details. For general information about garnishments in Dayforce, see Garnishment Management.
The following is a list of links to sections in this topic that describe fundamental information about garnishments for Canadian employees in Dayforce:
- Payees
- Garnishment Calculation for Canadian Employees
- Separate Calculation Per Payment
- Arrears
- Court-Ordered Arrears
- Automatic Arrears Tracking in Dayforce
- Additional Information
Before you add garnishment records in the Payroll > Garnishments screen, you must configure the necessary third-party payee or verify that the payee already exists. Dayforce allows you to save a garnishment record only when you have assigned it a payee.
You can review system payees and add custom payees in Payroll Setup > Third Party Payees in the Payees tab. Some payees, such as for family support, are configured as part of Dayforce implementation. The Payment Method section of the payee details indicates how the payment is made to the payee.
See Third Party Payee Configuration.
Garnishment Calculation for Canadian Employees
Dayforce can calculate garnishments using several different methods, including entering a straight dollar amount, or using a percentage of pay after statutory deductions.
The garnishment does not automatically respect the minimum subsistence rule for the issuing province and the type of garnishment. You must manually set minimum subsistence in the garnishment details. Minimum subsistence rules define what portion of the employee's pay is protected from being garnished.
By default, the application includes all types of earnings in the garnishment calculation, except for reimbursement earnings. However, you can configure the garnishment to include reimbursement earnings, if needed. You can also configure the garnishment to exclude other types of individual earnings from the calculation. For more information, see the following topics:
Separate Calculation Per Payment
Dayforce calculates garnishments on each of an employee's payments separately, which includes running the subsistence rules if they are configured. For example, an employee has the following payments in a pay run:
- Normal pay for $1,000
- Additional earnings of $1,000 on a separate check, with a check template that allows garnishments
If the employee has a garnishment of $50, Dayforce attempts to deduct this amount from normal pay and from the earnings on the additional check separately, totaling $100 in deductions.
You can set a manual limit to prevent excessive garnishment deductions, such as a monthly or lifetime limit. For more information about the different kinds of limits you can set, see The Order Details Section. You can also exclude the earning from the garnishment calculation in the Excluded Earnings tab under garnishments, or you can exclude garnishment deductions from a check template for additional earnings.
There are two ways to track garnishment arrears owed by an employee in Dayforce:
- Court-ordered arrears: This is the most common way to set up a Canadian garnishment in Dayforce because it ensures compliance. These arrears are set up manually after an employee receives a court order to pay arrears on an existing garnishment. See Court-Ordered Arrears .
- Automatic Arrears Tracking in Dayforce: Turning on arrears tracking in Dayforce is only recommended in specific scenarios because it isn’t always compliant. When arrears tracking is turned on, Dayforce tracks garnishments and automatically creates arrears entries for amounts that the employee can’t pay due to insufficient pay or a minimum subsistence rule. See Automatic Arrears Tracking in Dayforce.
If an employee can’t or hasn’t made previous payments in an ongoing garnishment order, they are given a court order to pay the arrears amount that they owe. Typically, these arrears must be recorded as a garnishment entry alongside the regular ongoing garnishment in People.
For information on configuring garnishment entries in People, see Garnishment Order Details for Canadian Employees.
Note: In specific circumstances, you might be able to calculate arrears on an ongoing garnishment within Dayforce (See Automatic Arrears Tracking in Dayforce.).
Arrears garnishment entries are configured in the same way as regular garnishment entries, except that the following fields in the Order Details section of the Garnishments screen in People are filled differently for arrears than for regular garnishment entries:
- Order Number: For Ontario Family Responsibility Office (FRO ON) garnishments, the order number of the arrears entry must be the same as the order number of the regular garnishment entry that the arrears are associated with. For all other garnishments, the order number of the arrears entry need not be the same as the order number of the regular ongoing garnishment entry. For example, the order number of the arrears entry might be the order number of the regular ongoing garnishment entry with the suffix ARRS or ARREARS.
- Priority Number: The priority number of the arrears entry determines the order in which different garnishments are deducted from an employee’s pay. A garnishment with a priority number of 1 will be deducted if the employee’s salary is above the minimum subsistence amount. A garnishment with a priority number of 2 will only be deducted if the employee’s salary minus the previous deductions is above the minimum subsistence amount. For arrears, the priority number must be 2 so that the arrears amount is taken after the regular amount.
- Lifetime Limit: The lifetime limit is the total arrears amount. With each pay period, a portion of the arrears amount is withheld until the lifetime limit is satisfied.
Arrears withholdings are shown in the employee’s earning statement alongside the regular garnishment withholdings. They are also shown in the Garnishment History Report.
Automatic Arrears Tracking in Dayforce
When Dayforce can’t collect all or part of the amount specified in the garnishment details (because of insufficient pay or a minimum subsistence rule), it reports the amount as arrears in the Garnishment History Report.
Dayforce attempts to include any arrears from the previous pay run in the garnishment calculation for the current pay run. The deduction of arrears is dependent on the availability of sufficient pay, or the amount determined according to the minimum subsistence rule.
Important: Generally, it isn’t recommended to calculate Canadian garnishment arrears within Dayforce. This is because in Canada, it is the agency or court that is responsible for tracking and collection of arrears payments, not the payroll provider. Therefore, an employer does not have the legal authority to withhold arrears amounts without a court order, unless the employee gives explicit permission to Dayforce and the employer to transmit the funds owed as arrears.
This option is turned on by default. It is recommended to turn off automatic arrears tracking by going to System Admin > Client Properties, clicking the Properties tab, clicking the Payroll sub-tab, and selecting the Disable Canada Garnishment Arrears Calculation checkbox.
Important: After you commit a Canadian pay group with the Disable Canada Garnishment Arrears Calculation checkbox selected, you can’t clear the checkbox for future pay runs.
Example: You set a garnishment to deduct $700 from each pay, but in the current pay run, due to minimum subsistence rules of the jurisdiction, only $536.42 can be deducted for the garnishment. As a result, the Garnishment History Report displays arrears of $163.58, and Dayforce deducts the arrears amount in the next pay run, subject to minimum subsistence rules.
For more information about creating and managing garnishments for Canadian employees, see the following topics: