Upon receipt of legal documentation, the UHR Payroll Division is required by law to withhold monies from an employee’s wages to satisfy certain debts, referred to as involuntary deductions.
Payroll will notify an employee, by letter, of a debt withholding notice it has received, i.e.: a garnishment, tax lien, bankruptcy, or wage assignment. Employees should also receive prior notification of a debt collection by the issuing court or authorized agency.
A garnishment summons is issued by a General District Court on behalf of a creditor to recover a legal debt owed by an employee. The UHR Payroll Division is legally bound to withhold or garnish an employee’s wages as instructed by the court, however only orders issued by Virginia District Courts must be implemented. Payroll continues to garnish wages until either the entire amount is satisfied, the due date on the garnishment summons is reached, or the garnishment is released by the court by written notification. Payroll remits the withheld garnishment amounts to the appropriate court on behalf of the employee.
A bankruptcy decree is issued by a United States Bankruptcy Court on behalf of an employee to prevent further voluntary or involuntary debt collections.
Chapter 7 Bankruptcy
Generally, a Chapter 7 Bankruptcy decree accompanied by an Order Staying Levy or Garnishment stays any existing or future garnishments or liens against an employee’s wages for a specific time period.
Garnishment or tax levy funds withheld by UHR Payroll following the bankruptcy petition date are remitted to the employee. Debt funds withheld before the petition date but have not been remitted will be remitted according to the Bankruptcy Court’s instructions.
Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy decree accompanied by an Order Staying Levy or Garnishment stays any existing or future garnishment or lien against an employee’s wages until released.
Debt funds held by UHR Payroll Division are remitted to an appointed trustee as instructed by the Bankruptcy Court. Payroll may be ordered to withhold a specified amount from an employee’s paycheck for a specific number of months and remit the funds to the trustee.
Tax liens are issued by the Internal Revenue Service (IRS) and state tax departments to recover delinquent taxes, penalties, and interest charges.
Federal Tax Levy
UHR Payroll is required to withhold wages for an IRS tax levy based on the number of exemptions claimed by an employee. Payroll will notify an employee of a federal tax levy, in writing, and include a statement of personal exemptions. Employees have seven calendar days to complete this form and return it to Payroll. Payroll will start to withhold at the maximum rate (one personal exemption) if the form is not received within this time period.
Payroll will continue to withhold for a federal tax levy until released by written notification from the IRS or an order staying levy or garnishment from a bankruptcy court.
Virginia Tax Levy
UHR Payroll is required to withhold an employee’s entire net paycheck for a tax levy issued against them by the Virginia Department of Taxation. Net paycheck is defined, for this purpose, as an employee’s gross wages minus any existing payroll deductions and federal, state, and social security taxes. Payroll will notify an employee, in writing, of a state tax levy issued against them.
Payroll will continue to withhold an employee’s net paycheck until the debt is satisfied or is released by written notification from the Virginia Department of Taxation or an order staying levy or garnishment from a bankruptcy court.
A wage assignment is a voluntary withholding of a specific amount of wages between an employee and a creditor to satisfy a debt payment. UHR Payroll will withhold a specific dollar amount each pay period to satisfy the wage assignment agreement and remit the amounts as they are withheld.
An income withholding order is a court or administratively ordered deduction of a specified amount from a parent’s income for the payment of child support. UHR Payroll deducts the specified amount each pay period and sends it to the child support agency’s State Disbursement Unit (or another address when appropriate), which then forwards the payment to the custodial party. Payroll must honor an income-withholding order/notice for child support from any state.
Questions concerning the contracted amount to be withheld should be first directed to the agency issuing the wage assignment.