14 Setting Up Deductions for Wage Attachments

This chapter contains the following topics:

14.1 Understanding Deductions for Wage Attachments Setup

Before you can enter wage attachment information for employees, you must set up a deduction for each type of wage attachment. Setting up a deduction for a wage attachment is similar to setting up any other kind of deduction. Therefore, only the unique considerations for each type of wage attachment deduction are discussed here.

Wage attachment payments are deducted from an employee's disposable wage (disposable earnings). An employee's disposable wage is the amount that remains after all payments that are required by law have been deducted from the employee's gross wages.

These required payments include:

  • Federal income tax.

  • Social Security tax.

  • Medicare tax.

  • State income tax.

  • State unemployment insurance.

  • State disability insurance.

  • State employee retirement systems.

  • Local and county taxes.

  • Any other applicable state requirements.

Special considerations for a wage attachment deduction include:

Consideration Explanation
Effect on disposable wage For a wage attachment that is required by law, you should indicate that the attachment is a mandatory deduction when you specify its effect on disposable wage.
Calculation once per pay period Typically, you set up the system to calculate a wage attachment deduction only once per pay period. Therefore, if an employee receives a payment (such as a bonus) in addition to a regular payment, the wage attachment payment is deducted only from the regular payment.
Accounts Payable integration If the JD Edwards EnterpriseOne Payroll system is integrated with the JD Edwards EnterpriseOne Accounts Payable system, you can set up a wage attachment DBA to generate vouchers.
Declining balances When you set up a wage attachment deduction, set the Declining Balance field to N (No). The system uses the method of calculation to calculate the declining balance.
Amount due Because wage attachment balances typically vary by employee, you should not enter an amount due for a wage attachment DBA. Instead, you enter the amount due when you assign wage attachments to individual employees.
Negative pay situations You can set up loan deductions to adjust or be placed in arrears in a negative-pay situation. When an employee does not earn enough in a pay period to pay the deduction, the system can place the deduction in arrears.

You set up a garnishment deduction to deduct court-ordered payments resulting from nonpayment of personal debts or overdue child support. The debts on which these imposed payments are based are already past due.

In some cases, you might need to associate fees with a wage attachment. For example, your organization might charge fees for administering garnishments.

You set up a tax levy deduction to deduct court-ordered payments for back taxes that the employee owes.

You set up a wage assignment deduction to deduct ongoing debts, including child support and maintenance, from an employee's earnings.

14.2 Setting Up Garnishment Deductions

This section provides an overview of garnishment deduction setup, lists a prerequisite, and discusses how to set up garnishment deductions.

14.2.1 Understanding Garnishment Deduction Setup

You set up a garnishment deduction to deduct court-ordered payments resulting from nonpayment of personal debts or overdue child support. The debts on which these imposed payments are based are already overdue. Because each deduction must match the court orders, you might need to set up separate deductions for different employees.

When you set up a garnishment deduction, you can use a garnishment table to calculate the amount to withhold, or you can set up the deduction without a table, and use the wage attachment method to calculate the amount to withhold.

14.2.3 Form Used to Set Up Garnishment Deductions

Form Name FormID Navigation Usage
Basic DBA Information W059116E Pay/Deductions/Benefits Setup (G05BD4), PDBA Setup

Select the Deduction option and then click Add on the Work With PDBAs form.

Set up garnishment deductions.

14.2.4 Setting Up Garnishment Deductions

Access the Basic DBA Information form.

To set up a garnishment deduction:

  1. On the Basic DBA Information form, enter a numeric code from 1 to 7 in the Source of Calculation field.

  2. Enter G in the Method of Calculation field.

  3. Enter the attachment table number for your garnishment tables in the Table Code field.

    If you do not want to use a table to calculate the garnishment amount, enter NOTBL in this field. If you do not attach a garnishment table to the DBA, the system uses the method and amount information that you enter using the Employee Wage Attachments Review program (P07107) to calculate the garnishment.

  4. Complete the steps for setting up essential DBA information.

14.3 Setting Up Exemption Rules for Wage Garnishments

This section provides an overview of exemption rules for a garnishment, lists the form used to work with exemption rules for wage garnishments, and discusses how to:

  • Enter wage attachments for a garnishment.

  • Enter exemption rules for a garnishment.

14.3.1 Understanding Exemption Rules for a Garnishment

You must enter exemption rules for an employee when the government specifies exemption rules that must be adhered to when you process garnishments and child support wage attachments.Use the Exemption Rules tab on the Wage Attachment Revisions form to capture all rules that determine exemption amounts for child support and garnishment wage attachments. These rules are used in conjunction with all existing functionality for wage attachments. You can set up these rules as a flat amount, a percentage, or a table method. When you use a table method, calculation tables store the upper limit, lower limit, and exemption rate for the individual garnishment or child support order. The exemption rules are stored in the Wage Attachment Exemption Rule table (F071074). The system enables you to calculate exemption amounts:

  • Based on a flat dollar amount.

  • Based on a percentage of gross or net wages.

  • Based on a range of gross or net wages.

  • Based on a flat dollar amount in combination with a range of gross or net wages.

  • Within multiple wage ranges.

The JD Edwards EnterpriseOne software enables you to calculate wage attachment after subtracting the exemption amount from the wage.

14.3.2 Forms Used to Work with Exemption Rules for Wage Garnishments

Form Name FormID Navigation Usage
Basic DBA Information W059116E Pay/Deductions/Benefits Setup (G05BD4), PDBA Setup

Select the Deduction option and then click Add on the Work With PDBAs form.

Set up fee deductions.
Wage Attachment Revisions W07107B Employee Management (G05BE1), Wage Attachment Workbench

Click the Add button on the Work With Wage Attachments Workbench form.

Enter wage attachments for a garnishment.

Enter exemption rules for a garnishment.


14.3.3 Entering Wage Attachments for a Garnishment

Access the Wage Attachment Revisions form.

Case Number

Enter the number that is assigned to the wage attachment by the issuing agency. When you enter wage attachments, the system prevents you from entering duplicate case numbers.

Case Date

Enter the date that the wage attachment was issued by the agency.

Minimum Net Pay

Enter the minimum net pay amount that the court may have allowed the employee to take home.

Obligee Number

Enter the address book number of the person, company, or individual who initiated the claim and is due the money.

B: Biweekly

W: Weekly

S: Semimonthly

M: Monthly

A: Annually

C: European Annualized

The system uses the value in the Description-2 field on user-defined codes indicates the number of pay periods per year and is used to calculate the amount per pay period for a salaried employee.

Amount Due

Enter the amount that is due. The amount due is one of the following amounts.

The amount due for a declining balance (Declining Balance field value is Y).

The amount due for a wage attachment deduction.

This amount is required for all wage attachments except a child support deduction.

The amount due for a declining balance must be specified at one of these assignment levels:

Deductions, benefits, and accruals (DBA) setup

Group assignment

Employee assignment

For wage attachment setup, the system stores the amount due in a different table and does not display it in the DBA instructions for employees.

You cannot specify the amount due during time entry. When the amount due equals zero, the DBA becomes inactive.

Payee Number

Enter the address book number for the supplier who receives the final payment.For wage attachments, the payee number is the address book number of the agency, company, individual, or court that is to receive the payment of the check.

Original Balance

Enter the original balance due on the wage attachment. This is the total amount that must be withheld from the employee's paychecks to meet the court order requirement. For example, if the employee was served a court order for an outstanding garnishment, the system displays the total amount that is due. This is not the current outstanding balance, which is carried in the Amount Due (AD) field.

The Remaining Balance on the Detail Wage Attachment Ledger is reduced by the amount of the deduction each pay period that it is deducted.

No of Periods (number of periods)

Enter the number of periods for which a deduction or benefit should be taken. The system automatically decreases this number by one for each period taken. For example, if the number of periods for a deduction is 12, then after one deduction is taken, the number automatically changes to 11.

A/P Voucher (Y, N) (accounts payable voucher (yes, no))

Enter a code that specifies whether the system generates a voucher for the DBA, tax, or wage attachment during the final update phase of the payroll processing cycle. Values are:

N: The system does not generate a voucher.

Y: The system does generate a voucher.

Amount

Enter the amount to be withheld from the paycheck of an employee for a wage attachment. Based on the method, this amount may be used as a comparison to a percentage.

Method

Enter a value from user-defined code (UDC) table 05/GA that specifies the method that the system uses to calculate a wage attachment deduction. Values are:

Blank: The system uses information in the Standard Annual Exemption Amounts and Additional Exemption Amounts tables to calculate the garnishment.

1: The lesser of the flat amount or percent of disposable wage. (Use for child support.)

2: The greater of the flat amount or percent of disposable wage. (Use for child support.)

3: The greater of the flat amount or percent; the difference becomes the arrearage deduction if an arrearage amount exists. (Use for child support.)

4: The flat dollar amount; the difference between the new disposable wage and the minimum net pay equals the arrearage amount. (Use for child support.)

5: The flat dollar amount unless the amount is greater than percent of wage; then use the secondary amount. (Use for child support.)

6: The flat dollar amount, unless the new disposable wage is less than the minimum net pay; then adjust the amount until the minimum net is reached. (Use for garnishment and levy.)

7: The percent of disposable wage adjusted to minimum net. (Use for garnishment and levy.)

8: The lesser of the percent of gross or table amount. (Use for garnishment.)

9. The lesser of the percent of gross or debt. (Use for garnishment.)

$: The flat dollar amount. (Use for garnishment, levy, and loans.)

%: The percentage of disposable wages (Use for garnishment and levy.)

E: The wage attachment equals the exemption subtracted from source wage. (Use for garnishment.)

Note: To perform the garnishment calculation for Quebec, you must select wage attachment method E in conjunction with exemption method 4.

Source of Calculation

Enter the wage basis that the system uses to calculate the rule. This UDC code (07/DB) specifies the basis of a deduction, benefit, or accrual. When the system calculates the gross amount for disposable net wages, it does not use the basis of calculation. The gross amount includes all earnings that have a positive effect on the gross and net payment. For wage attachments, use one of these codes:

1-8: Garnishment, tax levy, wage assignment (child support and maintenance).

R: Loan, interest.

0: Fees.

Wage Attachment Credit

Enter the initial claim amount associated with a wage attachment. The system reduces this amount from the calculated wage attachment. This amount reduces the wage attachment to the minimum of zero.

14.3.4 Entering Exemption Rules for a Garnishment

Access the Wage Attachment Revisions form. Select the Exemption Rules tab.

Exemption Rule

Enter a value from the UDC table 07/XR to specify the exemption rule for calculating garnishment. Values are:

Blank: Apply exemption after calculation

When you leave this field blank, the system calculates additional exemption on the wage and then applies the exemption amount.

1: Apply exemption before calculation

When you enter 1 in this field, the system applies the exemption amount to the gross wage and then calculates the additional exemption amount.

Exemption Method

Enter a value from UDC table 07/XM that specifies the method to calculate an exemption amount for a child support or garnishment wage attachment. Values are:

1: Flat dollar amount.

2: Percent of gross or net wages.

3: Use an exemption table from which the exemption amount is retrieved.

If you use exemption method 3 and enter an amount in the Exemption Amount field, the amount is defined as a flat dollar value and is added to the exemption amount that the system retrieves from the table.

4: Use an exemption table to retrieve the additional exemption amount after subtracting the exemption amount from the gross wage.

If you use exemption method 4 and enter an amount in the Exemption Amount field, the system first subtracts that amount from the gross wage, then calculates the exemption amount from the table, and then adds the exemption amount to the calculated exemption amount. This amount is the actual exemption amount. The following example illustrates this calculation:

Gross wage = $2000

Exemption Amount = $520

Additional exemption from the table is 70%

In this case, the system calculates the additional exemption on the amount derived by subtracting the exemption amount from the gross wage. The amount would be ($2000 - $520) = $1480.

Then the system calculates the additional exemption amount by this formula: (70% * $1480) = $1036.

The system derives the total exemption by this formula:

Exemption amount + Additional exemption amount ($520 + $1036) = $1556

The garnishment amount in this case would be $2000 - $1556, which is $444.

Note:

To perform the garnishment calculation for Quebec, you must select exemption method 4 in conjunction with the wage attachment method E.
Exemption Amount

Enter the amount that the system uses to calculate child support or garnishment wage attachment. This can either be an amount or a percent, depending on the exemption method.

Minimum Exemption

Enter the minimum amount of pay that is exempt from the garnishment or child support wage attachment, even when the exemption calculates to a lower amount.

For example, an employee has a minimum exemption amount of 200$. If the employee's exemption calculates to a lower amount than 200$, the employee would still have 200$ exempt from the child support or garnishment wage attachment.

Note:

You cannot use minimum exemption with exemption method 1. If you enter an amount in this field, the system applies this rule after calculating the exemption.
Table Code

Designate the table code to be accessed in the F069026 table.

Note:

You can use a table code only with exemption methods 3 and 4. This field must be numeric.
Maximum Exemption

Enter the maximum amount of pay that is exempt from the garnishment or child support wage attachment, even when the exemption calculates to a higher amount.

For example, an employee has a maximum exemption amount of 200$. If the employee's exemption calculates to a higher amount than 200$, the employee would still have 200$ exempt from the child support or garnishment wage attachment.

14.4 Setting Up Fee Deductions

This section provides an overview of fee deduction setup and discusses how to set up fee deductions.

14.4.1 Understanding Fee Deduction Setup

In some cases, you might need to associate fees with a wage attachment. For example, your organization might charge employees administrative fees for maintaining garnishments.

You set up deductions for fees, and you base those deductions on the deductions for which you are collecting the fees. Fees do not apply to tax levies.

A fee deduction must have a higher DBA number than the deduction on which it is based. For example, you can base fee deduction 1120 on garnishment deduction 1104. You can base a fee deduction on only one deduction. Therefore, even when you charge the same fee for garnishments as for wage assignments, you must set up two fee deductions. Base one fee deduction on the garnishment deduction, and base the other fee deduction on the wage assignment deduction. You specify the based-on deduction number in the basis of calculation for the fee deduction.

When you define a wage attachment for an employee, you assign the fee deduction number to the associated wage attachment.

14.4.2 Forms Used to Set Up Fee Deductions

Form Name FormID Navigation Usage
Basic DBA Information W059116E Pay/Deductions/Benefits Setup (G05BD4), PDBA Setup

Select the Deduction option and then click Add on the Work With PDBAs form.

Set up fee deductions.
Basis of Calculation W059118B Select Basis of Calc. from the Form menu on the Basic DBA Information form. Enter a DBA range, if appropriate.

14.4.3 Setting Up Fee Deductions

Access the Basic DBA Information form.

To set up a fee deduction:

  1. On the Basic DBA Information form, enter 0 (zero) or R in the Source of Calculation field.

  2. Enter $ or % in the Method of Calculation field.

  3. Complete the steps for setting up essential DBA information.

  4. Select Basis of Calc. from the Form menu.

  5. On the Basis of Calculation form, complete the From PDBA and Thru PDBA fields for the wage attachment deduction for which you are collecting the fee.

  6. Click OK.

14.5 Setting Up Tax Levy Deductions

You set up a tax levy deduction to deduct court-ordered payments for back taxes that the employee owes. You set up a tax levy deduction in the same way that you set up any other type of deduction.

This section lists a prerequisite and discusses how to set up tax levy deductions.

14.5.2 Forms Used to Set Up Tax Levy Deductions

Form Name FormID Navigation Usage
Basic DBA Information W059116E Pay/Deductions/Benefits Setup (G05BD4), PDBA Setup

Select the Deduction option and then click Add on the Work With PDBAs form.

Set up tax levy deductions.

14.5.3 Setting Up Tax Levy Deductions

Access the Basic DBA Information form.

To set up a tax levy deduction:

  • On the Basic DBA Information form, enter 1,2,3, or 8 in the Source of Calculation field.

  • Enter L (tax levy) in the Method of Calculation field.

  • Enter 2 (mandatory) in the Effect on Disposable Wage field.

  • Complete the steps for setting up essential DBA information.

14.6 Setting Up a Wage Assignment Deduction

This section provides an overview of wage assignment deduction setup and discusses how to set up wage assignment deductions.

14.6.1 Understanding Wage Assignment Deduction Setup

You set up a wage assignment deduction to deduct ongoing debts, including child support and maintenance, from employees' earnings.

The courts typically rule that child support has priority over other types of wage attachments. This situation means that if an employee did not earn enough in a pay period to pay for all deductions, the child support deduction should be the last deduction to be adjusted.

To give the child support deduction first priority, assign it a lower DBA number than the numbers that you enter for other deductions. During payroll-cycle processing, the system adjusts (backs out) deductions in numerical order, beginning with the highest-numbered deduction. For example, deduction 1001 would be adjusted (backed out) before 1000.

You set up a wage assignment deduction in the same way that you set up any other type of deduction.

14.6.2 Form Used to Set Up a Wage Assignment Deduction

Form Name FormID Navigation Usage
Basic DBA Information W059116E Pay/Deductions/Benefits Setup (G05BD4), PDBA Setup

Select the Deduction option and then click Add on the Work With PDBAs form.

Set up wage assignment deductions.

14.6.3 Setting Up a Wage Assignment Deduction

Access the Basic DBA Information form.

To set up a wage assignment deduction: :

  1. On Basic DBA Information, enter a numeric code from 1 to 8 in the Source of Calculation field.

  2. Enter C in the Method of Calculation field.

  3. Complete the steps for setting up essential DBA information.