The myriad of government agencies and regulations that impact the garnishment of employee payroll can be very costly to comply with. It is not unheard of for some organizations to have over 50% of their employees having at least one garnishment on their wages, with multiple garnishments not out of the ordinary. In some organizations, the number of garnishment disbursements in a pay period can exceed the actual number of employees paid.

While a great deal of attention is paid to efficiently pay the employee through standardized direct deposit or pay cards, garnishment processing is not always given the same amount of focus. On a recent Peeriosity webcast within the Payroll research area, a featured company led a discussion on initiatives to find efficiencies with garnishment processing.

Due to the rising number of garnishments being processed, our feature company carved out a separate team within their Employee Services organization (with no added headcount) to focus solely on the processing, completing interrogatories, and responding to inquiries regarding garnishments. Additionally, they set up formalized Case Management, Service Level Agreements, and KPIs, as well as an initiative to improve the entire process. The team of four closed over 20,000 cases related to bankruptcy, child support, federal and state tax levy, wage assignments, student loans, and other court-ordered garnishments.

One of the initiatives in place at our presenting organization was to automate payments to agencies. A poll of other organizations found that while a few (11%) had completely automated this process, there was still a great deal of opportunity to be found in automating payments.

All newly received garnishments are either received at or forwarded to, the central support center where all documents are scanned and assigned a case number, and reviewed to determine if the employee in question is an active employee. If so, the case is forwarded to a member of the garnishment team and if not, the garnishor is notified.

Once received by the garnishment team, the appropriate action is taken, such as adding or updating the garnishment in the payroll system, completing the interrogatories, or whatever else may be required. The team works under an agreed SLA of closing all cases within one pay cycle from when an order is received.

Two of the key enablers of gaining efficiency in the garnishment process have been the implementation of Case Management and Account Reconciliation tools. Case Management tracks garnishments by employees, along with the supporting information and correspondence. Outstanding items are flagged and assigned for follow-up. Open items that have aged or need to be escalated are easily identified for action and cycle time, and defect reporting can easily be retrieved.

Our feature company has an extremely large workforce, with the majority being hourly employees. The challenge of managing the garnishments in an efficient and effective manner was a challenge that has been met with great success. What was fragmented is now centralized under a team of experts that have achieved service excellence (all cases resolved within one pay cycle), quality excellence (approaching six sigma levels), and cost reduction in the process (fewer FTEs in the process, automated payments).

What initiatives are you currently working on to transform your garnishment processing?

Who are your peers and how are you collaborating with them?