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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. Not only does the number of wage garnishments have 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.

So, whether you’re processing your first or fiftieth 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 it was 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 to a garnishment order 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 of laws 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 completely banned garnishment as a means of collecting on consumer debt.

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

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.

Processing child support orders takes precedence over all other types of wage garnishments. If an employee has multiple child-support-related garnishments, the most recent support order 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 of error is practically nonexistent. Employers who don’t pay attention to the details of each wage garnishment order could find themselves facing 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.


Tiffany Hill

by Tiffany Hill


Author Bio: Tiffany Hill is an experienced employment and labor law attorney who currently serves as Paycom’s HR Legal Advisor. She maintains professional memberships in the Oklahoma, Ohio and Louisiana Bar Associations and is an active member with the Society for Human Resource Management and the National Association of Professional Women. In addition to her Juris Doctorate, Tiffany holds degrees in Civil Law and Political Science. In her spare time, Tiffany enjoys spending time with her three young sons and cultivating aspiring leaders through mentorship programs.

2016 I-9 form updates

What You Need to Know About the Recently Updated I-9 Form

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What You Need to Know About the New I-9

On Nov. 14 the U.S. Citizenship and Immigration Services (USCIS) published a new version of the Form I-9 which is used to verify the identity and employment authorization of workers.

When is it Valid?

While the revised version is available now, you can still use the current Form I-9 (dated 03/08/2013) until Saturday, Jan. 21, 2017. After Jan. 21, all previous versions will be invalid and employers must use the new version (dated 11/14/2016.)

What Changed?

According to their press release, USCIS explained Form I-9 changes to include:

“easier to complete on a computer.”

• The addition of prompts ensuring that information is entered correctly
• Section 1 now requires “other last names used” rather than “other names used,” reducing the probability of employees entering nicknames into the field
• The inclusion of a supplemental page for the preparer/translator
• Streamlined certification for certain foreign nationals

The changes are also expected to help make it “easier to complete on a computer.” This can be seen through enhancements such as online calendars, access to updated instructions and drop-down lists.

What to Look for In Your Software

Employers must ensure Form I-9 is completed properly for every individual they hire, so many businesses rely on HR technology to help them automate their employment verification process.

However, not all solutions meet U.S. federal regulations when it comes to filing I-9 forms. Moreover, the U.S. Immigration and Customs Enforcement (ICE) rulings hold employers responsible for their software vendor’s noncompliance. An article for HR Magazine entitled “The Compliance Risks of I-9 Software,” noted that the U.S. Immigration and Customs Enforcement regulations state that electronic I-9 systems should provide backup and recovery of records to protect against information loss, as well as reasonable controls to ensure integrity, accuracy and reliability.

Staying Informed

It’s crucial that HR leaders thoroughly research differences in systems and settle on one that ensures I-9 consistency and allows for easier spot-check audits. Moreover, businesses should consider an all-in-one human capital management (HCM) technology that provides peace of mind when updates, like the recent I-9 form, occur.

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.

 



Author Bio: As a Human Resource Professional with over 20 years of experience, Jenny has extensive experience in management, mentoring, policy development and recruiting. Jenny's team player mentality and leadership abilities make her an elite HR Director who is always on top of the latest HR trends. She relentlessly directs associates and executives to achieve their maximum potential for both themselves and their companies.

Taking that second look at your overtime expansion plan.

Why Your Overtime Expansion Plan Is Worth a Second Look

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Why Your Overtime Expansion Plan Is Worth a Second Look

The U.S. Department of Labor’s overtime expansion rule is expected to go into effect on Dec. 1, requiring employers to meet an increased salary threshold, which — for most exempt employees — renders them ineligible from receiving overtime pay. Although the Fair Labor Standards Act (FLSA) impacts almost every business and business owner nationwide, some employers may believe that simply cutting a few hours will help them avoid increased labor costs and noncompliance penalties under the new rule.

But, because the salary threshold’s increase is so dramatic, the law is complicated and the consequences of noncompliance can be devastating, many businesses could require huge changes to stay in line.

Some of those changes may include:

  •  Tracking overtime and catch-up payments per the new 10 percent provision
  • Creating and communicating policies to newly nonexempt employees on how to utilize their mobile phones to track work completed after hours
  • Empowering managers to recognize noncompliance risk in everyday situations

What’s more, it only takes one employee filing a claim with the Department of Labor to have just cause for investigation.

In 2015, a record 8,954 FLSA cases were filed. While many audits are initiated by employee complaints, the U.S. Department of Labor’s Wage and Hour Division (WHD) can choose to conduct an investigation into a company’s timekeeping and payroll practices at any time. According to the WHD’s website, “in the fiscal year 2015, more than 42 percent of investigations were agency-initiated, up 35 percent from just six years ago.”

 

Large-Scale Pushback

As the compliance deadline for the new overtime rule draws near, states are growing apprehensive of the rule’s sweeping impact. In fact, in September, 2016, 21 states came together to file a lawsuit against the Department of Labor.

According to an article in The National Law Review, the crux of the states’ argument is that the new rule will cause state and local governments to incur increased labor costs that would decimate their budgets.

Despite the states’ push back, employers are encouraged to continue preparing for the Dec. 1 deadline.

 

Don’t DIY

It is crucial that businesses take a second look at their overtime expansion plan to avoid the costly consequences noncompliance could bring. A few guiding questions to get your business started might be:

  • Are all your job descriptions and company policies up-to-date?
  • Can you provide proof of exemption for every employee classified as exempt?
  • Could you accurately report three years’ worth of employee wages with confidence that everyone was paid correctly?
  • Are your managers trained to recognize and avoid noncompliance issues regarding overtime?

 

Companies need a trusted ally to help them remain compliant. With Paycom’s Labor Cost Analysis tool, businesses can find the most cost-effective plan for their unique situations. This, combined with powerful human capital technology such as document management, time and labor management and training tools, can help you lessen the impact overtime expansion has on your business and your people.

The right tools and plan help ensure the changes your business employs are smooth instead of stressful. All it takes is a second look.

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.

 


Katy Fabrie

by Katy Fabrie


Author Bio: Katy Fabrie is a Marketing Specialist at Paycom where she assists with executing integrated marketing campaigns. With extensive experience in both writing and research, Katy enjoys crafting content that helps HR professionals develop strategies to reach their goals. Katy has created both digital and printed content for a myriad of local and national companies, and she enjoys continually expanding her HR knowledge base. Outside of work, Katy enjoys reading, running and spending time with her husband, Colby, and dog, Fox.

master compliance

3 Ways Your HR Team Can Master Compliance

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3 Ways Your HR Team Can Master Compliance

Complex rules, weighty administrative responsibilities, zero margin for error: When it comes to complying with employment legislation, the burden for U.S. businesses — both large and small — is substantial.

Small and medium-sized businesses in particular must manage their resources wisely, and can find it increasingly difficult to allocate the staff – and the time – to manage all of their company’s obligations for complying with today’s labor legislation. Larger businesses, with thousands of workers employed across state lines, face the challenge of ensuring HR teams are following the right rules. It’s no wonder managing compliance can feel overwhelming.

But it doesn’t have to be. Implementing a few best practices can make it easier to master the growing compliance burden and protect your company.

Here are three best practices to help you master compliance.

1. Automate Your Compliance Processes

Not only are government agencies producing a ton of rules and regulations, but businesses also have to deal with the mounting complexity of those regulations. The Affordable Care Act (ACA) is a perfect example. It’s one of the most complex pieces of federal legislation ever conceived, and despite many HR leaders’ best efforts, the nuanced nature of government regulations, like ACA, makes manually tracking and storing information time consuming and precarious.

Enter automation.

Automation improves a business’s efficiency and takes some of the guesswork out of complex processes. Specifically, the right system should be able to automate tasks like tracking garnishment payments and sending required COBRA correspondence. Through automation, businesses gain something truly valuable — peace of mind.

2. Proactively Find Areas of Risk

The risk of noncompliance is real and felt most notably in steep costs. Take the Fair Labor Standards Act as an example.

Not only do businesses have to contend with rising penalties associated with noncompliance, but class-action and wage-and-hour lawsuits add a painful one-two punch. These blows can leave marks. In fact, according to a report from Seyfarth.com, there has been a staggering 115 percent increase in value of the top 10 wage-and-hour class-action settlements since 2014.

But wait, there’s more: Litigation lawyers with splashy ads and the ubiquity of online information actually encourage employees to file claims against their employers. Additionally, the U.S. Department of Labor’s Wage and Hour Division has increased the number of investigations by 35 percent in the last six years. These investigations are launched independently of employee complaints.

With the odds seemingly stacked against businesses, foresight and planning is crucial. Businesses that have the ability to quickly audit their workforce by gathering easily accessible and accurate data can proactively manage their risk of noncompliance and find opportunities for improvement.

3. Be the Ultimate Resource for Your C-Suite

Big regs can mean big changes for businesses. Take, for example, recent changes to overtime regulations. On its face, overtime expansion looks like a simple question of time and labor. The solution may seem simple as well: Cut a few hours here or reassign a few duties there in order to avoid increased labor costs. However, because the salary threshold essentially has doubled, controlling overtime costs can require many changes to how a large percentage of a company’s workforce is paid and scheduled.

That’s why it’s so important to provide your C-suite with the data and information it needs to make the best decisions for your company.

Experienced executives rely on key event alerts; intuitive, automatic reporting; and legislation overviews to keep them at the top of their game. Additionally, those types of tools give HR leaders crucial time to prepare solutions and points of reference when presenting recommendations in the boardroom.

 

Get a free executive summary on the challenges businesses face in today’s regulatory environment 

 

Just as the Industrial Revolution’s spinning jenny replaced the laborious job of hand-spinning wool and cotton, HR technology can drastically improve a business’s efficiency and output. Automation features like push reporting allow companies to schedule reports for things like expiring employment authorization documents and ACA status changes.

We know when it comes to leading your company through intensifying government regulations, you don’t simply want to make it — you want to master it. With these tips and the right HR technology, you can be well-positioned to do just that.

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.


Katy Fabrie

by Katy Fabrie


Author Bio: Katy Fabrie is a Marketing Specialist at Paycom where she assists with executing integrated marketing campaigns. With extensive experience in both writing and research, Katy enjoys crafting content that helps HR professionals develop strategies to reach their goals. Katy has created both digital and printed content for a myriad of local and national companies, and she enjoys continually expanding her HR knowledge base. Outside of work, Katy enjoys reading, running and spending time with her husband, Colby, and dog, Fox.

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