People

Wage Garnishments: When Discretion and Confidentiality Are Required

Part of a series  |  Wage Garnishment Insights

Corri Flores

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With all the personal data being transmitted back at forth, it is critical to ensure that the details included in the wage garnishments process are always kept secure and confidential.

Processing wage garnishments can be a sensitive, emotional topic that employees may prefer their employers not be part of. However, processing wage garnishments is not optional for employers and often those garnishment orders include personal data that must be kept confidential. Personal identifiable information like social security numbers (SSN), addresses, payroll data and other private details may be included in the orders. These personal details are often necessary for you to properly identify your employee and set the wage garnishment orders up in your payroll system. Additionally, you may be required to provide confidential details in your responses to the garnishment orders.

Wage garnishment for child support

When we look at child support wage garnishment orders, the SSN is often a primary identifier and included on all orders issued by a state child support agency. Child support agencies use the SSN within their system, along with the case identification numbers to issue orders, make modifications, as well as apply payments received. Child support agencies have systems that rely on the SSN for proper processing. New hire reporting, electronic income withholding orders (e-IWO), electronic medical support notices (e-NSMN), and lump sum reporting are key child support tasks that necessitate the inclusion of the SSN of the non-custodial parent.

For other types of wage garnishment orders, such as creditor garnishments, tax levies, and for bankruptcy plans, the use of SSNs varies. Some garnishors may not include or require the SSN, or it may be masked if included within the order, while others may still include the full SSN. It is important that you follow the instructions for each type of wage garnishment order to include the required personal data elements when responding or processing payments; otherwise, you may cause delays, additional follow-up, and potential security issues. If you disclose personal or confidential information due to a wage garnishment, you need to ensure that you do so in a secure manner that aligns with compliance, security requirements, and wage garnishment laws.

Establishing your wage garnishment process

Are you confident that your current wage garnishment process is taking all these varying requirements into consideration while keeping your employees' personal information secure? If not, we encourage you to create an established, secure process when wage garnishment orders are received and responded to, including payments. Additionally, you should regularly test the security of your internal and external processes. Limiting those within your company that have access to wage garnishment details also helps to limit the access of personal and sensitive details. Whether paper or electronic data, wage garnishment processing and related details should be stored securely, only accessible by authorized individuals.

Paycheck solutions for wage garnishment

Wage garnishment electronic transmission methods via established security protocols is another measure for keeping personal data secure . Implementing electronic transmission and receipt of orders, such as e-IWO, electronic tax levies (e-Levy), or electronic payments with established, verified recipients can help employers add additional layers of security for keeping personal data secure. Employers' systems need to be able to accommodate masking certain data elements such as SSNs, unmasking, as well as electronic transmissions to stay abreast with industry changes.

Do you have the infrastructure in place to handle these processes electronically and feel confident you are doing everything you can to protect your employees' information?

Wage Garnishment FAQs

1. Do employees need to be notified of wage garnishments?

All U.S. states have laws or state court rules that require the employee be notified that a wage garnishment order has been issued to their employer. Some states require the person who obtains the order, e.g. the judgment-creditor or garnishing agency, notify the debtor/employee whereas other states require the employer, after receiving the garnishment order, notify their employee. Some states require that certain instructions to the employee be included in these notifications, such as how to request a change to their garnishment order. Additionally, federal wage garnishments have very specific notification requirements.

Always notifying an employee that a wage garnishment order has been received is a best practice for employers. These notifications can help ensure employees are aware that there will be a reduction in their take-home pay so they can budget accordingly, receive the garnishor's contact information, as well as help prevent or resolve questions that an employee may have.

2. Will wage garnishment deductions show up on the employee's pay stub?

Yes, deductions for wage garnishment orders will show up on an employee's pay stub, although the way they are described on the pay stub can vary depending on the employer's pay system. As a best practice, employers should notify the employee in advance after a wage garnishment order is received to avoid the employee being unaware of these deductions; many states require the notification by law).

3. What does a wage garnishment look like on an employee's paycheck?

The description of a wage garnishment order on an employee's paycheck varies based on the employer's payroll system and might appear as "child support" or "garnishment" or "levy", etc.

4. Can wage garnishment affect the prospect of ongoing employment?

Wage garnishments, especially for child support, are common orders for employers to receive. The Consumer Credit Protection Act (CCPA) is a federal law that protects an employee from being fired because their earnings are garnished for one debt. The CCPA also limits how much of an employee's wages can be garnished for certain debts and obligations including child support, alimony and consumer debts, and state law may provide greater protections to employees.

5. Can an employee be fired for a wage garnishment?

The Consumer Credit Protection Act (CCPA) is a federal law that protects an employee from being fired because their earnings are garnished for a single debt. In addition, state laws may provide greater protections to the employee. Please review federal and state law for additional information.

Ease your burden and improve compliance

ADP Wage Garnishments, one of the solutions offered in ADP's suite of ADP SmartCompliance^® solutions, provides support for administering withholding orders for earnings paid through payroll.

Download the SmartCompliance^® guidebook to learn how ADP solutions can reduce your administrative burdens while helping you maintain or improve compliance.