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3 Things Employers Should Know About Wage Garnishments

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Millions of Americans’ wages are garnished every year, meaning most employers have processed at least one wage garnishment.

Creditors and financial institutions now use wage garnishments to collect on everything from medical bills to consumer debt. Debt collectors, creditors and debt buyers file numerous consumer credit lawsuits annually in almost every state. Just as the number of wage garnishments has the potential to increase, so does the time it takes an employer to fully execute one. Some interest-accruing orders could leave employers responsible for withholding wages for years.

Whether you are processing your first or 50th wage garnishment, keeping these things in mind can help you consistently mitigate risk and reduce your company’s liability:

  1. You must respond to a writ of garnishment, even if issued to you in error.

Sometimes, courts accidentally send a writ of garnishment either to the debtor’s previous employer or the wrong employer altogether. If you receive a garnishment order under either of these circumstances, you still must answer the garnishment. Specific procedures exist to help employers navigate this situation.

Remember, when you receive a writ of garnishment, the issuing court is ordering you to seize property in the form of wages. Failing to properly respond could result in noncompliance with a court order and leave you on the hook for the entire amount of the debt.

  1. Laws for calculating garnishments vary depending on the type of order and/or the state in which you are located.

States’ wage garnishment laws differ from one another and from federal law. Understanding which set to follow will ensure you’re accurately calculating garnishment amounts. Generally, you must follow your state’s wage garnishment laws, even if the order originated out-of-state.

Federal law provides that no more than 25 percent of an employee’s disposable earnings can be withheld. However, some states allow garnishment of no more than 10 percent of an employee’s wages. Others have rules against collecting amounts that drop an employee’s earning levels below the poverty line. North Carolina, Pennsylvania, South Carolina and Texas have banned garnishments as a means of collecting on consumer debt.

The U.S. Department of Labor advises employers faced with conflicting withholding requirements to follow whichever law results in the smaller garnishment amount.

Exceptions exist for garnishments that result from bankruptcy, nonpayment of state or federal taxes or a child support or alimony order. Withholding percentages for these garnishments are different and you must determine which law takes precedence. For example, employers executing withholding orders for child support or alimony must abide by garnishment laws of the state that issued the order and the state where the employee works, depending on which part of the process they’re executing.

Understanding and following the variances in state and federal laws is crucial to remaining compliant with wage garnishment orders you receive.

  1. Some garnishments take priority over others.

should be given priority over those in arrears.

Other types of garnishments require employers to process existing orders before newer ones. Failure to process garnishments by legally mandated order can result in noncompliance.

Carrying out wage garnishments can be complicated. The administrative burden of executing an order can be challenging for employers, considering the margin for error is practically nonexistent. Employers who do not pay attention to the details of each garnishment order could face penalties for noncompliance.

For some companies, outsourcing wage garnishments to a knowledgeable HR and payroll provider is one option that can help them remain compliant, mitigate risk and reduce liability for every wage garnishment they process.


Matthew Paque

by Matthew Paque


Author Bio:

Matthew A. Paque is Paycom’s Director of Legal and Compliance. In this role, he is responsible for Paycom’s legal affairs including compliance and risk management. He has served in a variety of leadership and legal positions in both the private sector and in government. Before joining Paycom, Paque was an attorney at the law firm of McAfee & Taft and previously was Assistant General Counsel at Tronox a global mining and chemical company. He holds a J.D. from the University of Oklahoma and a B.A. from Oklahoma City University. Paque is also an adjunct professor at Oklahoma City University’s Meinders School of Business.

4 Ways to Prevent Sexual Harassment

4 Ways to Prevent Sexual Harassment in the Workplace

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Online searches of the term “sexual harassment” in recent months are not only up, but way up: ever-changing, but approximately more than 500%, per a Google Trends report. For HR and business leaders, this startling increase indicates your people seek answers.

The recent surge in internet searches not only highlights the current tidal wave of harassment scandals, but also calls into question the effectiveness of today’s anti-harassment training. The U.S. Equal Employment Opportunity Commission (EEOC) has long cited training as a critical component to prevention, yet the number of EEOC charges over the years remains largely unchanged.

Get Your Workforce ‘On Course’ with Paycom Learning

It’s easy to surmise this number should be decreasing if training is effective, but it’s not that simple. Anti-harassment training is just one step to creating a safe workplace culture.

Why you need more than training

In a recent Saturday Night Live sketch, cast member Cecily Strong played a frantic HR representative quizzing an employee about anti-harassment dos and don’ts. “There’s no wrong answer,” she said, “just super-wrong answers.”

It’s a comical, but realistic take on how some companies use anti-harassment training as a cure-all. While training is one step in the right direction toward prevention, it’s time companies offer a full solution.

The EEOC’s own task force emphasizes training as an essential component: “However, to be effective in stopping harassment, such training cannot stand alone but rather must be part of a holistic effort undertaken by the employer.”

Steps toward prevention

Here are four steps to creating a culture sincere about preventing harassment, based on EEOC practices:

One: Set the bar. Make it known your business has a zero-tolerance policy for inappropriate workplace behavior. Your expectations must apply to all levels of the organization, without exception.

Two: Create a written policy. Don’t stop at defining unacceptable behavior; include the proper way to report it. Ensure whoever handles these complaints can remain neutral and has the appropriate knowledge and authority to investigate and resolve complaints. Allocate appropriate resources to address and resolve any anti-harassment claims, and stick to your policies.

Three: Train all levels of your organization, from senior leaders to entry-level employees, on what constitutes discrimination and harassment, and your process for reporting. Ensure you have different trainings for employees and supervisors. Training should be relevant and engaging to your workforce. Say goodbye to plugging in the DVD player; invest in interactive training that includes knowledge checks and nuanced scenarios, as opposed to an outdated video highlighting only overt behavior.

Four: Communicate your expectations early in the employee onboarding process and throughout their employment. Use HR technology that allows for insight into the last time an employee reviewed your training or policies. Take advantage of auto-enrollment rules to ensure policies and trainings are reviewed by everyone annually.

Keep in mind, there is no surefire way to eliminate harassment or discrimination. For example, as a society, we’ve long enacted laws against criminal behavior, but we’re not naive enough to believe simply having those laws will eliminate crime altogether; it’s a way to communicate and clearly enforce expectations.

The goal of your policies, training and processes should be similar: Emphasize what’s not acceptable behavior, encourage reporting and build confidence with your workforce that you will investigate every complaint, so you may bring them all to an appropriate resolution.

For more information, check out Sexual Harassment: Making the Workplace Safe for Everyone, our post about how organizations can learn from the Harvey Weinstein effect.

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Posted in Blog, Compliance, Featured

Rachel Hittle

by Rachel Hittle


Author Bio:

Rachel Hittle oversees a team of content creators in Paycom’s learning and development department. Together, they design e-learning courses relevant to today’s employees on topics ranging from compliance to leadership. A highlight of her career was designing and implementing the company’s first client certification program. Prior to joining Paycom, the University of Kansas journalism graduate worked as a television news reporter.

third gender

California Legally Recognizes ‘Non-binary’ as Third Gender, EEO-1 reporting remains the same

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In October, California passed Senate Bill 179 to recognize a third gender option on state-issued IDs, driver’s licenses and birth certificates. The new law also makes it easier for California residents to change their legal gender to male, female or nonbinary. For EEO-1 reporting purposes, employers still will be required to report all workers as either male or female, even if an employee declines to self-identify as one or the other.

As defined by the bill, “nonbinary” is an umbrella term for people with gender identities that fall outside the traditional conceptions of strictly female or male.

Beginning Sept. 1, 2018, applicants no longer will be required to have undergone clinical treatment for gender transition when seeking a judgment recognizing a change of gender. Beginning Jan. 1, 2019, an individual will be able to change their gender on their birth certificate by submitting an application to the state registrar. Also required is an affidavit, made under penalty of perjury, attesting the request for a change of gender is to conform the person’s legal gender to the person’s gender identity.

The new law also requires applicants for a driver’s license (including renewals) to choose from one of the three gender categories.

Effect on employers

Although California employees may identify as nonbinary, this third option currently does not exist on the EEO-1 report, therefore, employers still will be required to report all workers as either male or female on the EEO-1 report, even if an employee declines to self-identify as one or the other. Under current guidance of the U.S. Equal Employment Opportunity Commission, employers will be allowed to record and report the person’s biological sex based on a good-faith observation.

However, California employers must remain mindful of an employee or applicant’s choice to identify as nonbinary. Pursuant to California Fair Employment and Housing Act regulations, employers should request gender information from applicants only on a voluntary basis and should not discriminate against applicants based on their failure to designate as male or female on applications. Furthermore, to avoid potential liability, employers should identify employees by their preferred gender, name or pronoun, including gender-neutral designations.

Other states

Although California is the first state to allow a nonbinary gender option on birth certificates, residents of Oregon and Washington, D.C., recently were allowed the option to select a third gender option on driver’s licenses. In June, Washington, D.C., began offering an “X” option in addition to female and male designations on state identification cards.

Similarly, in July, Oregon began allowing individuals to mark their gender as “X” for nonbinary or unspecified on state driver’s licenses and identity cards. Currently, New York is attempting to pass similar legislation.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in Blog, California, Compliance, Featured

Kristin Fisher

by Kristin Fisher


Author Bio:

As a compliance attorney for Paycom, Kristin Fisher monitors legal and regulatory changes at the state and federal level, with a focus on labor and employment laws, to ensure the Paycom system is updated accordingly. Previously, she served as an attorney at the Oklahoma City law firm Derryberry & Naifeh LLP. Fisher earned a bachelor’s degree and MBA from the University of Central Missouri, and her Juris Doctor from the Oklahoma City University School of Law. Outside of work, she enjoys cooking, hiking, going to the movies and spending time with her fiancé.

Social Security Wage Base

The 2018 Social Security Wage Base increases to $128,400

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Each October, the Social Security Administration (SSA) announces cost-of-living adjustments based on changes in national average wages. These adjustments take effect the following January.

Based on available data, on Oct. 13, the SSA communicated the maximum amount of wages subject to Social Security tax for 2018 to be $128,700, an increase from $127,200 in 2017.

However, due to additional information received later that month, the SSA announced a revised amount of $128,400 – or less than $300 originally reported – on Nov. 27.

In addition, the SSA’s revision impacts the “bend points” – that is, figures used in the computation of Social Security benefits – for primary insurance and the family maximum.

Employer responsibility

For 2018, an employer must withhold the following from employee wages:

  • 6.2% Social Security tax on the first $128,400 of employee wages (maximum tax is $7,960.80; i.e., 6.20% × $128,400), plus
  • 1.45% Medicare tax on the first $200,000 of employee wages, plus
  • 2.35% Medicare tax (regular 1.45% Medicare tax + 0.9% additional Medicare tax) on all employee wages in excess of $200,000.

These rates and wage limits will be updated in the Paycom system effective Jan. 1, 2018. For more information, visit the Social Security website.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in Blog, Compliance, Employment Law, Featured

Ali Nowrouzi

by Ali Nowrouzi


Author Bio:

As a tax research analyst for Paycom, Ali Nowrouzi monitors payroll news and information released by federal and state agencies. He previously worked in the oil and gas industry as a document and data specialist. Nowrouzi holds an associate’s degree in accounting from Rose State College and studied accounting at the University of Central Oklahoma.

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