1. Section 9 Other Deductions From Pay
Involuntary & Voluntary Deductions

2. Federal Levies Notice of Levy - Form 668-W
Part 2 thru 5 must be given to employee
Part 2 – Employee copy Part 3 – to be received back from EE, completed and sent to IRS
Part 4 – to be received back from EE, kept

3. Exempt from Levies Unemployment compensation Workers Compensation
Railroad Retirement Act pension and annuities
Some armed services personnel retirement and disability payments
Certain Public Assistance Payments
Child Support Order ALREADY on the books (received prior to the levy)

4. To Determine Exempt from Levy
Use part 4 of form 668-W to determine the number of exemptions claimed – do not use Form W4
Obtain IRS Pub Table for Figuring Amount Exempt from Levy on Wages, Salaries, and Other Income
Based on the pay period and number of exemptions claimed, determine the exempt amount
If you do not receive the completed parts 3 & 4 the exempt amount is determined using the Married Filing Separate bracket on Pub. 1494

5. Take Home Pay
Take-home pay is the amount of an employee’s wages that remains after all normal deductions in effect at the time a levy is received have been subtracted from the gross pay
Pre-existing deductions
If deductions increase as a result of a pay increase, continue to subtract from gross wages
If deductions increase as a voluntary decision by employee, do not subtract increase amount from gross wages
Example: an employee with a 3% 401K deduction cannot increase their percentage. However, if they receive a pay increase, the resulting additional 401K amount is allowed as a subtraction from gross wages

6. Release of Levy
Form 668-D, Release of Levy/Release of Property from Levy – the form will include the final payment amount
Voluntary Deduction Agreement –
Form 2159

7. Child Support Uniform Withholding Notice for Child Support
Start withholding based on the effective date OR 14 days of the order date
Disposable Pay –
all deductions
required by LAW –
not benefits, might
vary by state

8. Child Support Limits 50% EE is Married 60% EE is Single
55% EE is Married +12 weeks in arrears
65% EE is Single +12 weeks in arrears
Total of all support orders has to be at or below the maximums – state limits may be lower

9. Multiple Orders
State law governs the multiple orders are handled. If the orders are from different states – work state law applies .
Allocation methods for multiples:
Allocate based on percentage
Allocate equally
1st come/1st serve

10. e-IWO & Medical IWO
Internet accessible way of obtaining, accepting, rejection, termination & lump sump payments
Medical Insurance Support Provision – by state. Non custodial parent provides medical insurance coverage (at equal cost as other employees) for their children.

11. Creditor Garnishment Governed by Federal and State law
Under the DOL, W&H Division
Consumer Credit Protection Act, Title III
Restricts states regulations
Restricts amount that can be garnished
Employee may not be
terminated because of
their wages being
garnished

12. What’s Covered & Limits
Covered in CCPA
Administrative Wage Garnishment
Alimony
Child & Medical Support
Creditor Debt
Student Loan
25% of weekly disposable earnings OR amount over the 30 times federal minimum wage (30x7.25=217.50)

13. Bankruptcy
Order is from court – until received, employer pays all garnishments in place. Once received all orders stop EXCEPT child support.
Bankruptcy order supersedes all orders including levies.
Once received all bankruptcy orders are paid to trustee that delegates the funds – again, exception is child support.

14. Student Loans Higher Education Act allows garnishment
Max for single garnishment is 15% or 30x federal minimum wage
Max for multiple garnishments is 25% or 30x federal minimum wage
Can not discharge, 30 day notice before start of garnishment
Termed EE who is rehired in 12 mo’s is given 12 additional mo’s from reemployment before garnishment can be put into effect.

15. Fed Agency Debt Non tax debt Agency will provide 30 day notice.
Limits are the same as loans (15% on one, 25% on multiple, or 30X federal minimum wage)

16. Garnishment Priority Table
Child support
Bankruptcy
Federal administrative garnishments*
Federal tax levies*
Student loan**
State tax levies
Local tax levies
Creditor garnishments
Employer deductions (e.g., for benefits)
Employee voluntary deductions
*All deductions in effect when a federal admin. Wage garnishment or fed. tax levy is received have priority over the order
**The law provides no guidance, but the Dept. of Ed allows child support to have priority

17. Legal concerns
Contact Bankruptcy trustee if there are any questions on support orders or any other garnishments
All orders are legal documents - any omissions may result in fines and penalties on the employer
Never deduct more than what’s allowed by law

18. FLSA restrictions
Board, lodging, and other facilities provided by the employer for the employee’s benefit may be deducted even if the employee’s wages will then be below the minimum wage. The employee’s participation must be voluntary.
Facilities are board, lodging, meals, housing, etc.
Facilities ARE NOT tools, required uniforms, company provided security, etc.
Section 9.1-7

19. Voluntary Deductions
Wage Assignments – agreement with a creditor in lieu of garnishment – state laws may apply
Union Dues – based on collective bargaining agreement
US Savings Bonds – Not allowed to be thru direct deposit as of 2011

20. Charitable Contributions
Donations from payroll of $250 or greater must be substantiated
Must include: amount of cash and noncash contributed, whether goods or services were provided in return, description and estimate of value of services
Documents include: pay stub, W2,
document from org., pledge card
$250 is applied to each
deduction separately