Wage Attachment Earnings Rules - Payroll Management

Wage Attachment Earnings Rules

You can date effectively define and maintain which supplemental and imputed earnings should be included as part of disposable income for support orders or other garnishments using Oracle Payroll wage attachment earnings rules.

You can define two types of information for each state:

  • Support Disposable Income indicates that this earning type is eligible for court orders.
  • Other Wage Attachment Disposable Income indicates this earnings type is elibible for attachment.You can also indicate that certain earning types are not eligible for attachment.

To enter wage attachment earnings rules for earnings categories not currently listed though already defined at your location, add the categories to the list using the Lookup type: US_SUPPLEMENTAL_EARNINGS.

Note: You cannot change the seeded rules. It is your responsibility to maintain any custom Wage Attachment Earnings Rules you define. Your rules, however, will be protected during any subsequent upgrades.

Garnishment Deductions From External Systems

You can use an external system to manage wage attachments. If you want to make entries from that system into Oracle Payroll for payroll processing, you can use five predefined deductions that come with Oracle Payroll:

  • Child Support
  • Federal Tax Levies
  • State Tax Levies (not supported by Oracle Payroll)
  • Local Tax Levies (not supported by Oracle Payroll)
  • Creditor Garnishment (also used for DCIA orders)

These deductions all belong to the classification Wage Attachment and the category Garnishments, and all have the processing type Recurring.To use them you need only make links for them and provide balances.These deductions for garnishments all have the same input values,which are explained in the following below table:

Garnishment Deductions Input Values

Garnishment Deductions Input Values

The formulas for these garnishment deductions do the following:

  • Calculate deduction amount. Check whether employee’s net pay will be greater than Guaranteed Net amount after taking deduction.
  • IF net pay not greater than Guaranteed Net amount, hold amount not taken and feed garnishment arrears balance.
  • IF total owed is reached, stop processing garnishment for this employee.
  • IF collection of total amount owed would reduce net pay below guaranteed net, issue message reporting how much has been taken and how much remains to be taken.

Wage Attachment Formulas

The system generates one of three basic formulas for a wage attachment, depending on whether it is a tax levy, a support order, or credit debt. Separate formulas exist for tax levies and child support orders because there are special rules to determine exempt earnings for these categories of attachment. Whichever formula is used, formula processing of wage attachments occurs in three steps:

  • Determination of employee disposable wages or take home pay (earnings minus tax and any other allowable deductions),and of his or her exempt earnings or exemption allowance(percentage of disposable wages not subject to attachment).
  • Calculation of the amount to with hold. The wage attachment court order will provide the amount to be with held per payperiod and/or a total amount due. If no pay period amount is entered, Oracle Payroll will default to the maximum amount allowed by law. Added to the base amount may be an arrear age amount specified in the court order, and any fees that state law permits employers to with hold to cover their setup and administration costs.
  • Verification of amounts withheld. After the calculation of all wage attachments for an employee, a formula checks to ensure that all rules and limits applicable to these attachments have been taken into account. If it finds any violations, the formula makes adjustments to the previously calculated amounts,prorating them and creating arrear ages if necessary.

Note: The system holds calculation and verification results on two elements specially generated for this purpose, not on the base element for the wage attachment. These two elements have the base element name with “Calculator” or “Verifier”added.

For example, if an wage attachment for a child support order has the name Child Supp1, the elements generated for the deduction have the names Child Supp1, Child Supp1 Calculator, and Child Supp1 Verifier.

Creating a Wage Attachment Earnings Rule

Wage attachment earnings rules allows you to date effectively define and maintain which supplemental and imputed earnings should be included as part of disposable income for support orders or other garnishments.

To create a wage attachment earnings rule:

  1. Set your effective date.
  2. Select Supplemental Earnings for the earnings type.
  3. Attention: The earnings types Imputed Earnings or Pre-Tax Deductions are provided for informational purposes only. These views enable you to double–check that the system is not attaching to imputed earnings or pre–tax deduction items.

  4. Select the appropriate level such as Federal or State and elect the appropriate state from the list of values, if needed.
  5. For each earnings category you defined, select the appropriate rule:Support Disposable Income or Other Wage Attachment Disposable Income.
  6. Attention: Oracle Payroll interprets the earnings category as not subject to attachment if a category is left unchecked.

  7. Save your changes.

Changing Wage Attachments

To change wage attachments on an employee’s record:

  1. Open the Entry Values window for the employee’s wage attachment.
  2. Update the deduction amount, or other details for the employee.
  3. Save the updated deduction amount.

Identifying the Wage Attachment

You initiate an wage attachment by entering information about it in the Deduction window. The system generates the deduction element with the necessary input values and balance feeds, and the deduction formula with the necessary processing and result rules.

Attention: Do not enter frequency rules for a wage attachment.

To identify, classify and categorize the wage attachment:

  1. If you must add a category for the deduction you are initiating, use the application utilities Lookups window to enter additional categories for this Lookup value : •US_INVOLUNTARY_DEDUCTIONS
  2. If the wage attachment amounts come from a payroll table you must enter the database, set up this table and enter values in it before defining the deduction.
  3. Note: If the rows of a payroll table reference something other than employee pay, age or job class (that is, if the table row type is not Age Range, Salary Range or Job Class), both the table row type and the table must be set up before you define the deduction.

  4. Set the effective date early enough to handle any historical entries.
  5. Attention: You cannot enter a deduction for employees before its effective start date.

  6. Enter a unique name for the wage attachment.
  7. This name applies both to the deduction element and its formula.It must start with a letter of the alphabet, not a number or symbol.You can also supply a reporting name, a short name that appears on reports and the statement of earnings.

    Attention: You cannot reuse the name of a wage attachment for an employee. Each wage attachment must have a unique name.

  8. Select Wage Attachment classification.
  9. Select a category.

Wage Attachments require selection of a category, such as alimony,or credit debt. Federal DCIA attachments should be categorized under garnishment or credit debt. The system automatically sets up the processing rules and arrear age rules for the wage attachment.

Updating Wage Attachment Earnings Rules

You can update your earnings rules to date effectively maintain which Supplemental and Imputed earnings should be included as part of disposable income for support orders or other garnishments.

To update a wage attachment earnings rule:

  1. Set your effective date.
  2. Query the wage attachment earnings rule you want to update.
  3. Make changes to the rule as appropriate.
  4. Save your changes.

Ending Wage Attachment Earnings Rules

You can date effectively end Supplemental and Imputed earnings rules.

To end a user–defined wage attachment earnings rule:

  1. Set your effective date.
  2. Query the wage attachment earnings rule you want to end.
  3. For each category, uncheck the appropriate rule: Support Disposable Income or Other Wage Attachment Disposable Income.
  4. Save your changes.

Wage Attachments Decisions

After initiation of a wage attachment, you can make certain modifications to the generated components so that they better meet your requirements. It is always best to make such modifications before using the deduction. To use the wage attachment in payroll runs, you must build links, and make entries to its input values.

Note: If you prefer to manage wage attachments using an external system, Oracle Payroll comes with some simple garnishment deductions already set up, to which you can make entries for payroll processing. These deductions all belong to the classification Wage Attachment and to the category Garnishments.

Payment of Wage Attachments or Garnishments

Oracle Payroll’s Check Writer process can produce checks for payment of Wage Attachments or garnishments either to organizations, or to individuals.

Wage Attachment Processing Priorities

To set processing priorities among deductions for wage attachments for an employee with more than one such deduction, enter secondary priorities for the deduction elements using the EntryValues window (accessed from the Element Entries window). Elements with lower priority numbers process first. The standard priority order for processing the various categories of attachment is this:

  • Bankruptcy orders
  • Support orders effective before federal tax levies
  • Federal tax levies
  • Support orders effective after federal tax levies
  • State tax levies (not supported by Oracle Payroll)
  • Creditor garnishments
  • All other attachments.

The following table identifies the status (optional, suggested, mandatory) of the entry value category for each type of wage attachment.

Note: Define allowances as a personal payment method before establishing the wage attachment.

Input Values for Wage Attachments

All generated deductions include the input values Additional Amount and Replacement Amount, for efficient management of one–time changes to the deduction amount.

Note: Oracle Payroll automatically stops issuing wage attachments from wages when the total owed is reached,regardless of whether a court-issued notice or form 668-D is received.

When you initiate wage attachments, the system generates elements with associated input values. You can use these input values to keep accurate records of the employees wage attachment. The following table lists the input value names and describes the purpose they serve.

Input Values for Deductions for Wage Attachments

Wage Attachment Fee Administration

Many states allow employers to recoup costs for administering Wage Attachments, such as court-ordered support and creditor garnishment.

Oracle Payroll allows you to date effectively maintain fees and fee limits for administering wage attachments in a given state according to your company policy. You are responsible for setting up and maintaining fee amounts for each state in which you have employees.

Note: For each state there can exist only one wage attachment fee rule per wage attachment category. You cannot have multiple wage attachment fee rules per wage attachment category for the same state.

You can create a new Wage Attachment fee rule, update an existing Wage Attachment fee rule, conclude an obsolete Wage Attachment feerule, and reinstate a Wage Attachment fee rule that concluded.

Rules for Wage Attachment Fees

The following table of predefined rules, available from the Wage Attachment Fee Rules window, help you define, maintain, and limit wage attachment fee administration:

Rules for Wage Attachment Fee Administration

Wage Attachment Earnings Rules

You can date effectively define and maintain which supplemental and imputed earnings should be included as part of disposable income for support orders or other garnishments using Oracle Payroll wage attachment earnings rules.

You can define two types of information for each state:

  • Support Disposable Income indicates that this earning type iseligible for court orders.
  • Other Wage Attachment Disposable Income indicates this earnings type is elibible for attachment.You can also indicate that certain earning types are not eligible for attachment.

To enter wage attachment earnings rules for earnings categories not currently listed though already defined at your location, add the categories to the list using the Lookup type: US_SUPPLEMENTAL_EARNINGS.

Note: You cannot change the seeded rules. It is your responsibility to maintain any custom Wage Attachment Earnings Rules you define. Your rules, however, will be protected during any subsequent upgrades.

Garnishment Deductions From External Systems

You can use an external system to manage wage attachments. If you want to make entries from that system into Oracle Payroll for payroll processing, you can use five predefined deductions that come with Oracle Payroll:

  • Child Support
  • Federal Tax Levies
  • State Tax Levies (not supported by Oracle Payroll)
  • Local Tax Levies (not supported by Oracle Payroll)
  • Creditor Garnishment (also used for DCIA orders)

These deductions all belong to the classification Wage Attachment and the category Garnishments, and all have the processing type Recurring.To use them you need only make links for them and provide balances.These deductions for garnishments all have the same input values,which are explained in the following below table:

Garnishment Deductions Input Values

The formulas for these garnishment deductions do the following:

  • Calculate deduction amount. Check whether employee’s net pay will be greater than Guaranteed Net amount after taking deduction.
  • IF net pay not greater than Guaranteed Net amount, hold amount not taken and feed garnishment arrears balance.
  • IF total owed is reached, stop processing garnishment for this employee.
  • IF collection of total amount owed would reduce net pay below guaranteed net, issue message reporting how much has been taken and how much remains to be taken.

Wage Attachment Formulas

The system generates one of three basic formulas for a wage attachment, depending on whether it is a tax levy, a support order, or credit debt. Separate formulas exist for tax levies and child support orders because there are special rules to determine exempt earnings for these categories of attachment. Which ever formula is used, formula processing of wage attachments occurs in three steps:

  • Determination of employee disposable wages or take home pay (earnings minus tax and any other allowable deductions),and of his or her exempt earnings or exemption allowance(percentage of disposable wages not subject to attachment).
  • Calculation of the amount to with hold. The wage attachment court order will provide the amount to be with held per payperiod and/or a total amount due. If no pay period amount is entered, Oracle Payroll will default to the maximum amount allowed by law. Added to the base amount may be an arrear age amount specified in the court order, and any fees that state law permits employers to with hold to cover their setup and administration costs.
  • Verification of amounts withheld. After the calculation of all wage attachments for an employee, a formula checks to ensurethat all rules and limits applicable to these attachments have been taken into account. If it finds any violations, the formula makes adjustments to the previously calculated amounts,prorating them and creating arrear ages if necessary.

Note: The system holds calculation and verification results ontwo elements specially generated for this purpose, not on the base element for the wage attachment. These two elements have the base element name with “Calculator” or “Verifier”added.

For example, if an wage attachment for a child support order has the name Child Supp1, the elements generated for the deduction have the names Child Supp1, Child Supp1 Calculator, and Child Supp1 Verifier.

Creating a Wage Attachment Earnings Rule

Wage attachment earnings rules allows you to date effectively define and maintain which supplemental and imputed earnings should be included as part of disposable income for support orders or other garnishments.

To create a wage attachment earnings rule:

  1. Set your effective date.
  2. Select Supplemental Earnings for the earnings type.
  3. Attention: The earnings types Imputed Earnings or Pre-TaxDeductions are provided for informational purposes only.These views enable you to double–check that the system is not attaching to imputed earnings or pre–tax deduction items.
  4. Select the appropriate level such as Federal or State and elect theappropriate state from the list of values, if needed.
  5. For each earnings category you defined, select the appropriate rule:Support Disposable Income or Other Wage Attachment Disposable Income.
  6. Attention: Oracle Payroll interprets the earnings category as not subject to attachment if a category is left unchecked.
  7. Save your changes.

Changing Wage Attachments

To change wage attachments on an employee’s record:

  1. Open the Entry Values window for the employee’s wage attachment.
  2. Update the deduction amount, or other details for the employee.
  3. Save the updated deduction amount.

Identifying the Wage Attachment

You initiate an wage attachment by entering information about it in the Deduction window. The system generates the deduction element with the necessary input values and balance feeds, and the deduction formula with the necessary processing and result rules.

Attention: Do not enter frequency rules for a wage attachment.

To identify, classify and categorize the wage attachment:

  1. If you must add a category for the deduction you are initiating, use the application utilities Lookups window to enter additionalcategories for this Lookup value:•US_INVOLUNTARY_DEDUCTIONS
  2. If the wage attachment amounts come from a payroll table youmust enter the database, set up this table and enter values in itbefore defining the deduction.
  3. Note: If the rows of a payroll table reference something other than employee pay, age or job class (that is, if the table row type is not Age Range, Salary Range or Job Class), both the table row type and the table must be set up before you define the deduction.

  4. Set the effective date early enough to handle any historical entries.
  5. Attention: You cannot enter a deduction for employees beforeits effective start date.

  6. Enter a unique name for the wage attachment. This name applies both to the deduction element and its formula.It must start with a letter of the alphabet, not a number or symbol.You can also supply a reporting name, a short name that appears on reports and the statement of earnings.

    Attention: You cannot reuse the name of a wage attachmentfor an employee. Each wage attachment must have a unique name.

  7. Select Wage Attachment classification.
  8. Select a category.

Wage Attachments require selection of a category, such as alimony,or credit debt. Federal DCIA attachments should be categorized under garnishment or credit debt.The system automatically sets up the processing rules and arrear age rules for the wage attachment.

Updating Wage Attachment Earnings Rules

You can update your earnings rules to date effectively maintain which Supplemental and Imputed earnings should be included as part of disposable income for support orders or other garnishments.

To update a wage attachment earnings rule:

  1. Set your effective date.
  2. Query the wage attachment earnings rule you want to update.
  3. Make changes to the rule as appropriate.
  4. Save your changes.

Ending Wage Attachment Earnings Rules

You can date effectively end Supplemental and Imputed earnings rules.

To end a user–defined wage attachment earnings rule:

  1. Set your effective date.
  2. Query the wage attachment earnings rule you want to end.
  3. For each category, uncheck the appropriate rule: Support Disposable Income or Other Wage Attachment Disposable Income.
  4. Save your changes.

Creating Wage Attachment Fee Rules

You create a wage attachment fee rule(frequency and amount, initial startup fee, etc.) and associate it with a wage attachment fee category for the specific states in which you have employees residing.

Note: For each state there can exist only one rule per Wage Attachment category.

You can not have multiple Wage Attachment fee rules per Wage Attachment category in thesame state.

To create a wage attachment fee rule:

  1. Set your effective date appropriately.
  2. Select information for State, Category, and Rule from the list of values for each field.
  3. Fill in appropriate amounts in the amount fields according to your company policies including correspondence fees.
  4. Save your fee rule.

Viewing Rules

The Wage Attachment Exemption Rules window allows users to view legislative data for informational purposes only. This window displays all legislative rules supported by Oracle Payroll concerning wage attachment disposable income exemption calculations. The Wage Attachment Limit Rules window allows users to view the currently identified limit rules: minimum and maximum with holding amounts per period, maximum with holding duration. These rules canbe affected by different state and wage attachment categories.

To view Wage Attachment Exemption Rules:

Navigate to the Exemption Rules in the View section of the Navigator

To view Wage Attachment Limit Rules:

Navigate to the Limit Rules in the View section of the Navigator.

Updating Wage Attachment Fee Rules

You can update your Wage Attachment fee rules to change fee amounts, to adjust the cap, or the frequencies of attachments. You can not update the state or category as that would in effect be creating an ew Wage Attachment fee rule.

To update a Wage Attachment fee rule:

  1. Set your effective date appropriately.
  2. Query the Wage Attachment rule you wish to update.
  3. Change the values that need updating, such as the Wage Attachment fee rule, or the amount of the Wage Attachment fee.
  4. Save your Wage Attachment fee rule.
  5. Select Update from the dialog box, or if the nature of your update is to correct a Wage Attachment fee rule that has in correct information, select Correct.

Ending Wage Attachment Fee Rules

If there are no records associated with a Wage Attachment rule, you may want to delete the rule. However, once a Wage Attachment fee rule is in use, you should not delete it.

To end a wage attachment fee rule:

  1. Set your effective date appropriately.
  2. Query the fee rule you want to conclude.
  3. Change the Amount to zero dollars.
  4. Save your fee rule.
  5. Choose Update from the dialog box.

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