Garnishments are created in People, in the Payroll > Garnishments screen of the employee record. Garnishment details are located in the Properties tab, in the General Details section. These settings are described as follows:
Before You Begin: The details in this topic apply to the task Create Garnishments for US Employees.
Effective From (Required)
This field is set to the current date by default, but you can change the date as needed. If the Effective From date falls after the start of a pay period, Dayforce considers the effective start date in relation to the date range of the start of the pay period through to the end of the pay period end date, or the pay date, whichever is later.
If the effective date falls within a pay period, and the garnishment is active (that is, the Active checkbox is selected for the garnishment in the General Details section), the application calculates the garnishment for the employee.
The Effective From date cannot be earlier than the date in the Court Order Date or Court Order Received Dates fields, in the Order Details section of the garnishment record. If you enter an effective date that is earlier than the court order date, the application displays a validation error when you try to save.
Effective To
This field is cleared by default, but you can add the date when the garnishment order ends, and the application stops calculating the garnishment. If you configure an effective to date that falls within a pay period, the application still calculates the garnishment for that pay period, but not for pay periods that fall after.
The Effective To field becomes mandatory in the case where you select Court Order end date exists from the Duration drop-down list in the Order Details section of the garnishment order.
Note: If you configure an end date for a record, and the date is reached, the application does not display the record in the list in the Garnishments screen by default. To view the record, you need to click Active at the top right of the list.
Issuing Agency (Required)
Select the agency that issued the garnishment order. The options are the federal government as well as states and possessions.
Support Agency Fees (fees charged by the Issuing State and remitted to the Issuing State for Child or Spousal Support) are driven by the Issuing State rather than the Employee’s Primary Work State or Override Work State like other items such as exemption tests and employer retained fees.
Garnishment Authority (Required)
Select whether the garnishment is issued by a federal or state authority.
- If you selected the federal government from the Issuing Agency drop-down list, the Garnishment Authority only contains the federal option.
- If you selected a state from the Issuing Agency drop-down list, the Garnishment Authority only contains the federal and state options.
Type (Required)
Select one of the predefined garnishment types from the list. The list of available types depends on the option you select from the Issuing Agency and Garnishment Authority drop-down lists. Details about garnishment types for US employees can be found in the topic Garnishments in US Payroll.
Primary Work State (view only)
This is the Primary Work State as currently set up in the Employee record. The Primary Work State controls the types of garnishments that are permitted, exemption rules for those garnishment types, and the maximum amount of any employer retained fees that can be charged to the employee.
FIPS Code
Optionally, enter the five or seven-digit alphanumeric code that identifies the county or locality of a child support order. The application uses this code for transmitting payments to the payee. This code is typically included in the child support withholding notice that is issued to begin the withholding procedure. The application validates that you entered a code for garnishments with an issuing agency of Florida, Illinois, or Michigan.
Name (Required)
Enter the system name for the garnishment. This name is displayed in Payroll, in earning statements, and in reports
Display Name (Required)
Enter the system name of the garnishment the application displays in Payroll and in reports. This can be the same as the value in the Name field.
Description
Enter an optional description for the garnishment. This description isn’t displayed outside of the Payroll > Garnishments screen of People, but can be included in ad hoc reports.
Active
The Active checkbox is selected by default for new garnishments, but you can clear it if needed. When this checkbox is cleared, the application does not calculate the garnishment in the current pay run, even if the garnishment is effective during that period.
By configuring a garnishment as inactive, you can save the record without the application actually calculating it for the employee.
When you select the Active checkbox and the garnishment is effective dated in the current pay run, the application calculates the garnishment amount.
Note: If you clear the Active checkbox of a garnishment and click Save, the application removes the garnishment record from the active list by default because it is no longer active. To view the record, you need to click All at the top right of the list. You can toggle between the Active and All buttons as needed.
Legal Entity
If an employee has work assignments in more than one legal entity, you can select an option from the Legal Entity drop-down list to define the legal entity for which the application calculates the garnishment. The Legal Entity drop-down list contains the legal entities that are associated with the employee's work assignments.
Important: If you don’t select an option from the Legal Entity drop-down list, and the employee has payments from more than one legal entity in the same pay run, the application calculates the garnishment for payments in the pay period.
For example, an employee has a $100 garnishment. In the current pay run they have a payment for $500 from Legal Entity A and a payment for $500 from Legal Entity B. If you leave the Legal Entity drop-down list cleared in the garnishment details, the application deducts $100 from each payment, leading to a total deduction of $200 this pay period.
Continuing this example, if you select Legal Entity A from the Legal Entity drop-down list of the garnishment's details the application deducts $100 from the payment for Legal Entity A, and does not deduct any garnishment from the payment for Legal Entity B.
If an employee receives payments from more than one legal entity, and you want to divide the amount of a garnishment between these payments, you can create separate garnishment records for each legal entity and split the amount of the garnishment between them. Continuing the above example, you create two garnishment records, each for $50. In the Legal Entity drop-down list for the first and second record, you select Legal Entity A and Legal Entity B, respectively.
Override Work State
By default, the application calculates the exemption, withholding limits, and employer-retained feeds for the garnishment based on the employee's work state. However, you can select a state from the Override Work State drop-down list for the application to use the exemption, withholding limits, and employer-retained fees for that state.
For example, if an employee works and lives in Wisconsin, but the garnishment is issued by Minnesota, you could select Minnesota (or another state) in the Override Work State field to override the employee's primary work state of Wisconsin and apply the rules of the state in the Override Work State field.
Important: Using the Override Work State setting might take you out of compliance. You assume the risk and responsibility for using the Override Work State’s garnishment type, exemption rules, and employer retained fees (if applicable).
Student Loan Type
In order for this drop-down list to be displayed, the Issuing Agency drop-down list must have Federal Government selected, and the Type drop-down list must have Student Loan - 505, or Non-Court Ordered Student Loan - 527 selected.
Select one of the following student loan type options:
- Higher Education Act (HEA): Federal HEA Student Loans do not permit any additional earnings or deductions that automatically reduce disposable income. They follow the federal CCPA rules for the definition of disposable earnings.
- Debt Improvement Credit Act (DCIA): Federal DCIA Student Loans do permit any additional earnings or deductions that automatically reduce disposable income for health deductions (medical, dental, vision). They follow the federal CCPA rules for the definition of disposable earnings.
Hold Garnishment
This checkbox is only displayed for garnishments that have Creditor Garnishment – 507 selected in the Type drop-down list. Moreover, for the application to display this checkbox, your role must be assigned the Allow Garnishment Hold role feature under Application Container > People > Employee Profile > Payroll > Garnishments in the Features tab of System Admin > Roles.
Select the Hold Garnishment checkbox to deduct the garnishment amount from the employee's pay but retain it for future payment to the creditor. For example, an employer might be required to apply a third-party creditor garnishment to an employee's pay but wait for confirmation of the total amount by writ of execution before sending the garnishment funds to the creditor. See Held Garnishments for US Employees.