Processing garnishments constitutes a significant work activity within the payroll process. Are you charging employees an administrative fee for this?
Peeriosity’s online collaboration forum takes a poll on “do you charge employees an administrative fee to process their statutory garnishments?”
Payroll departments have the unheralded task of enforcing court-ordered garnishments and deducting those amounts from an employee’s wages – as well as insuring they are received by the proper jurisdiction on-time. Ira Fialkow says he has seen as many as 11 different garnishments from a single employee pay-check (all going to different authorities). It is not all that uncommon for as many as 50% of the employees within a business unit have at least one garnishment per month. Processing garnishments is a significant work activity within the payroll process.
A Peeriosity member launched a poll to get some insights into what other organizations are doing regarding garnishment fees (hey, what’s another garnishment as a result of your garnishments?). Specifically, they asked;
“Does your payroll department withhold a fee? If not, why not?”As you can see from the data*, the Peeriosity member companies that responded are about split on this, with 50% not charging at all, 36% charging for any garnishment, and 14% using some discretion on what gets charged versus what doesn’t.
The subsequent poll question revealed that for those that don’t charge, the most stated reason was that they viewed it as too “negative” for employee relations.
Organizations have indicated that without any real standards amongst authorities, the administration takes time and material dollars. Other considerations include how much to charge (there may be some legal limits) and whether to charge per garnishment or just a flat fee.
What is your company’s philosophy on withholding an administrative fee for garnishments? Peeriosity members are invited to login to
www.Peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultant or vendors permitted. To find out if your company is already a member, or to get more information, contact us.
*to read more and see the chart click
here or visit
www.ssonetwork.com 
