Involuntary Deduction Fees for the US

Whenever the payroll process takes a deduction, it also takes the appropriate involuntary deduction processing fees.

Fee processing involves:

• Types of fees

• Fee priority

• Payee definition

• Payee assignment

• Fee waiving

What Types of Fees You Can Use

You can impose these types of fees.

Type of fee	How it's used
Organization fees	These are court or agency-ordered fees. These fees can be: Levied each pay period per order Limited to a one-time only initial payment Subject to a run, period, or monthly maximum Deducted as a flat amount or percentage, depending on the legislative rule or calculation value definition you select Note: The payroll process deducts these fees only if you specify a fee payee. These states have predefined organization fees for support orders. Arizona Arkansas Georgia Maine Mississippi Nevada
Processing fees	As the employer, you might charge an administrative fee for processing your employees' involuntary deductions. Without a payee, these fees don't appear on the payslip. The payslip doesn't include these fees. The payroll process doesn't enforce the fees' legislative limits. These fees can be: Levied each pay period per order Limited to a one-time only initial payment Subject to a run, period, or monthly maximum Deducted as a flat amount or percentage, depending on the legislative rule or calculation value definition you select Note: All Involuntary Deduction secondary classifications support these fees except:There are no predefined processing fee values for the Debt Collection Improvement Act (DCIA) and Educational Loan classifications.
Person fee	The payee for an employee-requested deduction.

How You Set the Fee Priority

The payroll process uses multiple predefined jurisdictional rules to enforce involuntary deduction fee priority. The details of them all is beyond the scope of this document.

For these secondary classifications	These are the rules
Creditor Debt Garnishment	The payroll process automatically calculates and applies one of these fee priorities. Take the fee from the deduction amount, and always reduce the amount Such as for Illinois and Wisconsin. Note: If the total owed remaining is less than the fee amount, the payroll process takes no fee during those pay periods. Take the fee from other wages, but don't reduce either the deduction or exemption amounts Such as for California and Louisiana. Take the fee first, and only reduce the deduction amount if there aren't enough earnings remaining to take both the fee and deduction amounts Such as for New Jersey and Washington.
All others	For all other secondary classifications that support fees, the payroll process: Takes the fee. If there aren't enough earnings remaining to take both the fee and deduction amounts, it reduces the deduction amount.

How You Define the Payee

Use the Third Parties task to define each payee recipient as either a person or organization.

For further info, see Third-Party Payment Methods in the Help Center.

You can use a third-party organization payee for the involuntary deduction payments, such as for the order amount payee. Be sure to select External Payee as the party usage code when configuring the payee.

How You Assign Payees to a Deduction

After you have defined the payee and attached them to an appropriate payment method, associate it to the involuntary deduction.

1. From My Client Groups, click Payroll.

2. Click Calculation Cards.

3. Search for and select the employee.

4. Open their Involuntary Deductions Card for editing.

5. Create or edit the calculation component associated with the involuntary deduction.

6. Select Calculation Component Details, and expand Involuntary Deduction Payment Details.

7. For each applicable fee type, enter the payee.

8. Save your work.

Note: You must include a processing fee payee if you're deducting processing fees and you want the fee to show on the employee's payslip. If you don't, the payroll process doesn't enforce the fee's legislative limits.

How You Waive Fees

Processing fees and organization fee amounts are predefined. To waive a processing fee, use the Calculation Value Definitions task to set the fee value to $0 for your LDG.

To waive a fee for a specific employee:

1. Use the Calculation Cards task to open their Involuntary Deductions card for editing.

2. Select the calculation component associated with the fee's involuntary deduction.

3. Click Enterable Calculation Values on Calculation Cards.

4. Click Create.

5. Search for and add <type> Processing Fee Per Pay Period Amount.

6. Enter the new amount, and click OK.

You can waive multiple fee types simultaneously using HDL. For further info, see Oracle Cloud Human Capital Management for the United States: Need to Set All Involuntary Deduction Fees to Zero In All PODS (2306182.1) on My Oracle Support.