Pursuant to California Senate Bill No. 501, the local minimum hourly wage in effect at the time earnings are payable must be used to calculate a creditor garnishment if the judgement debtor works in a location where the local minimum hourly wage is greater than the state minimum hourly wage. Affected employees will need a Wage Entity code.
Effective Date. July 1, 2016
If you do not have employees working in the state of California who are subject to a creditor garnishment and a local minimum wage, no action is required. Please retain this bulletin for future reference.
If you have employees working in the state of California who are subject to both a creditor garnishment and a local minimum wage, action is required by you, as soon as possible.
California Senate Bill No. 501 is effective July 1, 2016, and it makes the following changes to creditor garnishment deductions for California employees:
706.050.(A) Except as otherwise provided in this chapter, the maximum amount of disposable earnings of an individual judgement debtor for any workweek that is subject to an earnings withholding order shall not exceed the lesser of the following:
(1) Twenty-five percent of the individual's disposable earnings for that week.
(2) Fifty percent of the amount by which the individual's disposable earnings for that week exceed 40 times the state minimum hourly wage in effect at the time the earnings are payable.
We recommend that you review creditor garnishments and local minimum wage requirements for
All California employees. Your legal counsel can advise you as to whether creditor garnishments may need to be modified to comply with California law and if workers are subject to local minimum wage laws.
To comply with the new disposable wage calculation requirements for affected California employees, it will be necessary to set up the locality name and rate in the ADP system.
In order to ensure that your employees are coded with the appropriate locality name and the applicable minimum wage rate, please submit a request to ADP by following the below instructions. Your response is requested as soon as possible.
Email your Payroll Service Representative and include your Company Code/Company Name and "California WGPS" in the subject line. In the body of the e-mail, list the Company Code, File Number, Employee Name, Locality Name, and Locality Minimum Wage Rate. A sample template is included on the last page of this document to assist you. You will be emailed when the employees have been updated.
Once the locality name is set up in the ADP system, the ADP six position abbreviated name will display on the Autopay Master Control.
You can verify which employees are set up with creditor garnishments by reviewing the WGPS Wage Garnishment Verification Report in the Employee Lien Information Section. A 'Lien Type' of 'G' identifies a creditor garnishment. Employees with a creditor garnishment that has not been satisfied may seek a decrease or increase in their deduction amount.
Again, for employees that are not subject to a local minimum wage and a creditor garnishment, no action is required.
*************SAMPLE CALIFORNIA LOCAL MINIMUM WAGE TEMPLATE**************
Your response is requested as soon as possible. Please email your Payroll Service Representative.
Include your Company Code/Company Name and "California WGPS" in the title bar.
Company Code:
Company Name :
Co File Employee Locality Local Min.
Code Number Name Name Wage Rate
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___ _______ _____________________ ______________ ____.___
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___ _______ _____________________ ______________ ____.___
___ _______ _____________________ ______________ ____.___
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___ _______ _____________________ ______________ ____.___
___ _______ _____________________ ______________ ____.___
As always, please contact your ADP Payroll Service Representative or HR Business Partner if you have any questions regarding this development.