Creating State Garnishment Rules

Establish the manner in which PrismHR processes state garnishment rules with the State Garnishment Rules form.

The FG state garnishment rules record is for the federal government, and is the default template for all other states. You only need to enter the values that are different for a particular state. Everything else defaults to the values for the federal garnishment rules.

To create state garnishment rules:

1. Click and select State Garnishment Rules under System|Change.
2. Enter the two-character State Code, or FG for Federal Government.
3. Define the Rules for Calculating Withholding for Creditor Garnishments:
Field Description

Maximum Percent of

Select either Disposable Pay or Gross Pay, depending on the state rule you are setting up. Enter the maximum amount that can be withheld in the second field.

Minimum Wage Rate Multiplier

The multiplier is the number of hours multiplied by an employee's minimum wage to calculate the maximum disposable earnings that standard creditors can garnish. This is overridden if the garnishment maximum is lower. For example, if the multiplier is 40, the system multiplies the minimum wage by this number. The result is the minimum pay that an employee has after taxes and garnishments. Standard creditors can garnish amounts left after subtracting taxes and the minimum pay amount from an employee's gross pay.

 

From 1/1/2025 up to 06/30/2027, Oregon Creditor Garnishment calculations have been programmed by effective date to use the following exempt amounts as defined by Oregon State Law based on the pay period for each of the effective dates. These amounts will be applied when the Minimum Wage Rate Multiplier field for the state of Oregon is set to 30.

Pay Period

Weekly

Bi-Weekly

Semi-Monthly

Monthly
01-Jan-2025 thru 30-Jun-2025 $305 $611 $655 $1309

01-Jul-2025 thru 30-Jun-2026

$338

$675

$737

$1458

01-Jul-2026 thru 30-Jun-2027

$400

$832

$912

$1792

On July 1, 2027, calculations will default to State Garnishment Rules for the state of Oregon:

Note:  It is recommended that for the state of Oregon, on the State Garnishment Rules form, the Minimum Wage Rate Multiplier field be set to 30 until July 2027.

Minimum Wage Rate Source

The source that determines the minimum hourly rate for creditor garnishment maximum calculations.

Hours Calculation Method

The method that calculates minimum net pay for semi-monthly or monthly pay periods under CCPA rules for creditor garnishments:

• Factored: Multiplies the weekly hours by either a factor of 2.16 (for semi-monthly) or 4.33 (for monthly). The factor method may be less accurate because of rounding errors, but some states specify its use.
• Annualized: Multiplies the weekly hours by 52 and then divides by the number of pay periods in the year. For example, for semi-monthly, the calculation is ( (30.00 x 52)/24 ).

Administrative Processing Fee

The fee applied per pay period to process creditor wage garnishments.

Maximum Monthly Fee

The maximum monthly fee collected from employees for processing creditor wage garnishments.

Reduce Limit by Fee Amount

There are two options:

• Yes - Reduces the CCPA limit by the administrative processing fee for this state. This is only for non-consumer garnishments.
• No -The system does not reduce the limit.

Non Consumer Min Wage Multiplier

The multiplier is the number of hours multiplied by an employee's minimum wage to calculate the maximum disposable earnings that creditors can garnish in case of a judgment or non-consumer garnishment. This is overridden if the garnishment maximum is lower.

 

For example, if the multiplier is 30, the system multiplies the minimum wage by this number. The result is the minimum pay that an employee has after taxes and garnishments. A non-consumer creditor can garnish amounts left after subtracting taxes and the minimum pay amount from an employee's gross pay.

HOH Maximum Percent

Enter a value if the state has a maximum allowed creditor garnishment percentage rule for heads of households.

State Tax Levy Maximum Percent of

Select:

• Disposable Pay: income after taxes are deducted
• Gross Pay: total income

Allow Creditor Garnishment deduction before State Levy

Certain states have varying requirements on how to calculate a State tax levy when an employee has other garnishments. This option allows you the flexibility to better support states allowing other garnishments including creditor garnishment deduction before calculating the amount due to the state levy.

If for a selected state, this checkbox is:

• Checked - then the order of priority for deduction of garnishments will be as follows:
4. Child Support (Spousal Support)
5. Bankruptcy
6. Levies (IRS Tax Levy, FTB)
7. Creditor Wage Garnishment / Student Loan
8. State Tax Levy
• Unchecked - then the order of priority for deduction of garnishments will be as follows:
1. Child Support (Spousal Support)
2. Bankruptcy
3. Levies (IRS Tax Levy, FTB)
4. State Tax Levy
5. Creditor Wage Garnishment / Student Loan

Note:  When using this option to prioritize Creditor Wage Garnishments prior to the State Tax Levy, you should ensure that the State Tax Levy maximum percent has been entered for the applicable State Code on this form.

Multiple Order Priority Method

This field will help you to manage the varying rules for different states for creditor garnishments like child support. Select one of the following options from the dropdown:

• First In, First Out - earliest dated garnishment will be deducted first. This is the same as the default behavior.
• Prorate Allocation - proportionally deduct creditor garnishments based on wage to garnishment ratio.
• Equal Share Allocation - equal and simultaneous deductions for multiple creditor garnishments are in place.

Note:  If a Creditor Garnishment has an override state, it will follow the rules for the override state. Also, this feature will work both with or without the Enhanced Garnishment Capping field on the System Parameters form being selected.

Additional Disposable Deductions

Other deductions that are removed from gross earnings to calculate disposable income for the purpose of computing creditor wage garnishments.
6. Define Rules for Calculating Withholding for Child Support Payments.

Note:  If a field is left blank, the system defaults to a maximum percentage. If zero is entered, the system uses it as the maximum percentage and no child support garnishments are calculated.

Field Description

Maximum Percent of Disposable When Not Supporting Another Spouse/Child

Amount that can be withheld when the employee does not support another child and is not in arrears. The default is 60%.

Maximum Percent of Disposable When Supporting Another Spouse/Child

Amount that can be withheld when the employee is supporting another spouse or child and is not in arrears. The default is 50%.

Maximum Percent of Disposable When not Supporting Another Spouse/Child but in Arrears

Amount that can be withheld when the employee does not support another spouse or child and is in arrears. The default is 65%.

Maximum Percent of Disposable When Supporting Another Spouse/Child but in Arrears

Amount that can be withheld when the employee is supporting another spouse or child and is in arrears. The default is 55%.

Administrative Processing Fee

Fee applied per pay period to process child support wage garnishments.

Maximum Monthly Child Support Fee

Fee collected from employees for processing child support wage garnishments.

Maximum Monthly Spousal Support Fee

Fee collected from employees for processing spousal support wage garnishments.

Multiple Order Priority Method

Method that determines the priority of multiple child support orders used by the state. This field will help you to manage the varying rules for different states for child support garnishments. Select one of the following options from the dropdown:

• First In, First Out - earliest dated child support garnishment will be deducted first. This is the same as the default behavior.
• Prorate Allocation - proportionally deduct child support garnishments based on wage to garnishment ratio.
• Equal Share Allocation - equal and simultaneous deductions for multiple child support garnishments are in place.

Note:  If a child support garnishment has an override state, it will follow the rules for the override state. Also, this feature will work both with or without the Enhanced Garnishment Capping field on the System Parameters form being selected.

Deduct Arrears from Supplemental Pay

Indicates whether the state requires an arrears deduction from supplemental pay.

Include Reported Tips in Base Pay?

Indicates whether reported tips are included in base pay when calculating the maximum amount to garnish for child support.

Child Support Additional Deductions

Deductions from gross earnings to calculate disposable income for the purpose of calculating child support wage garnishments.

Waive Fee When Garnishment Is Reduced Below Scheduled Amount

Indicates whether a fee is waived when the garnishment is below the scheduled amount.
7. Click Save.