Create garnishment setup – A summary of the activity

 Through this activity you can create a garnishment setup in an organization. Wage garnishment is a legal procedure through which earnings of an individual are required to be withheld by an employer for the payment of a debt.  Most garnishments are made by court order. Examples are child and spouse support, creditors recovery, voluntary assignments etc.  Through this activity, you can set the parameters for recovery of the garnishments from the employee(s).

Creating garnishment setup requires you to specify a unique id and short description that identifies a garnishment setup.

Disposable Earnings: The recovery of garnishments from an employee is based on his disposable earnings.  A Disposable earnings is the amount of pay available for garnishments.  It is the amount available after legally required deductions like the federal, state, and local taxes, Social Security, unemployment insurance, etc. You can map a pay element under which disposable earnings are defined or specify a rule that will determine disposable earnings for the specified garnishment setup.

Limit on Garnishment per pay period: This indicates that you are to specify the maximum amount that can be recovered as garnishments from an employee. The amount is specified under the law. You can specify the maximum limit in terms of amount, percentage or the rule.

Garnishment Pay Element: You can also specify the pay element under which the garnishments can be recovered. You can also map a pay element under which you can deduct service charges for rendering the services.

Setting Priority: If you select more than one type of garnishment for recovery, you must specify the order in which the garnishments can be deducted. Assigning a priority to each garnishment type does this. The garnishment type with higher priority will be deducted before the garnishment type with lower priority.

Overriding Garnishment percent: you can also specify percentage for a garnishment type that can be overridden. This indicates that as you specify an override percentage for a garnishment type, the system will override the equivalent amount from the specified garnishment type and adjusts the same for other garnishment types. This is necessary only if the total amount for recovery of garnishments exceeds the maximum amount.

Getting familiar with the pages inside

Prerequisites

Garnishment types must have been defined in the quick codes.

The pay elements under which disposable earnings are defined or garnishments are recovered must have been created in the “Create Pay Element” Activity.

The pay element under which services are charged must also be created in the “Create Pay Element” Activity.

What you can do in this activity

Create garnishment setup for a unit

Create garnishment setup for a unit.

You can create garnishment definition for an organization unit. You are to specify

• A unique code and short description for the garnishment setup.

• The pay element or rule under which disposable earnings are defined.

• The maximum limit for garnishment recovery.

• The pay element under which garnishments are recovered

• The pay element under which service charges are recovered

• The garnishments types that will be included in the garnishment definition.

• Select the “Save Garnishment Setup” pushbutton to save the details entered.