Canadian Payroll Reporter

3 Canadian HR Reporter, a Thomson Reuters business 2015 News CPR | April 2015 Payroll plays key role in supporting Payroll plays key role in supporting family maintenance enforcement programs family maintenance enforcement programs From calculating the amount to deduct to remitting payments From calculating the amount to deduct to remitting payments to to communicating with enforcement offi ces, payroll compliance is essential communicating with enforcement offi ces, payroll compliance is essential BY SHEILA BRAWN PAYROLL PROFESSIONALS are acutely aware of the rules for deduct- ing and remitting amounts for C/ QPP, EI and income tax. One deduc- tion that may not be as well-known is the one for enforcing family or child support orders. Each province and territory in Canada has enacted legislation gov- erning the enforcement of support orders, including a requirement for employers to garnish an employee's wages where necessary. "It's a big component of what we do in terms of dispersing money to families. I know there is paperwork and time involved (for employers) but the proceeds go to a very, very good cause," says Christopher Beresford, director of mainte- nance enforcement in British Columbia. When payroll departments receive a wage attachment order or notice from a court or a family maintenance enforcement program, it is essential that they follow the steps for complying with it. Failure to do so can lead to serious consequences for employers, includ- ing become liable for the employee's support payments or arrears. Overall, Beresford says most payroll de- partments do a good job complying with support orders. Any compliance problems that programs see are usually the result of new payroll professionals not understanding the rules or payroll departments forgetting the rules because they do not handle a lot of support deduction orders, says Hannah Roots, man- aging director of B.C.'s Family Maintenance Enforcement Program (FMEP). "The reality is that most people pay their maintenance, so the number of cases that we have where we are instituting an attachment like this on wage is not a lot, so I think some businesses may only see these once a year or once every couple of years," she says. While the specific requirements for com- plying with support deduction orders vary depending on the jurisdiction, all require that employers deal with them promptly. Many provinces require employers to ac- knowledge in writing that they received an order for an employee within seven to 10 days of getting it. One of the most important elements of compliance is calculating how much to de- duct from the employee's pay. In some ju- risdictions, the support deduction notice will specify an exact dollar amount. In other provinces, the order will specify only a per- centage and payroll departments will have to calculate the amount to deduct while follow- ing rules for how much of the pay is exempt from the deduction. Most jurisdictions exempt a certain amount of an employee's pay from gar- nishment for support orders. As with de- ductions, some provinces specify a dollar amount that is exempt, while others set out a percentage. In some jurisdictions, court or- ders determine the exemption and in some cases, judges have the authority to change an exemption amount. Depending on the jurisdiction, the ex- emption may apply to the employee's gross or net pay, making it important to thorough- ly read the order before starting deductions. In British Columbia, the formula for cal- culating deductions is more complex, says Beresford. "It's a staggered or staged deduc- tion. The first amount of money goes off the clear amount and there is a rate of deduction for the next few hundred dollars and then a higher rate of deduction. It's not simply tak- ing off 25 per cent or 30 per cent of the total paycheque." An online calculator that FMEP has on its website helps. "It's particularly useful for smaller employers because our formula can be a little daunting. It gets well used," says Roots. In fact, Beresford says employers in the province use the calculator over 10,000 times a year. "Essentially, what a business can do is put in the gross wage (and) the payment pattern. Is it biweekly? Is it bimonthly? Is it monthly? Is it weekly? The calculator does all of the be- hind-the-scenes work and spits out a num- ber that is the actual amount to be deducted from the paycheque," he says. Once payroll departments have determined how much to deduct, they should not change the amount without specific instructions from a family maintenance enforcement program, even if the employee re- quests that they do so, says Lori Marshall, acting director of policy, administration and operations sup- port with Alberta's Maintenance Enforcement Program (MEP). "If an employee indicates that the amounts requested are incorrect or that the employee has already or will make the payments themselves, the employee should be directed to contact MEP to resolve the issue. Unless the employ- er receives updated information from MEP, please remit as directed," she says. Just as important is ensuring the deduc- tions are sent to the maintenance enforce- ment program by the due date. "Probably the biggest single problem we see is late payments," says Beresford. "The attachment is not acted on quite as quickly as it should be or that we would like it to be and the payments may be arriving past the date by which they are to be received." Different deadlines apply depending on the jurisdiction. In B.C., for example, em- ployers have to remit the payment within five days of deducting it. In Quebec, remit- tances follow a specific schedule. Revenu Québec is responsible for collect- ing the support payments. It requires em- ployers that remit other source deductions (QPP, QPIP and provincial income tax) to Revenu Québec weekly or twice monthly to send in the support deductions at the same time. In all other cases, employers must remit support deductions by the 15th day of the month following the month they de- ducted them. Making sure ongoing deductions and re- mittances continue even after arrears are paid off can also be challenging, says Beresford. "There are two parts of the deduction. There is the deduction of the regular support that is due for a child or children and then there is the deduction of arrears that has built up over time," he says. "It is important the em- ployer know that there is both the ongoing and the arrears and that they don't stop de- ducting at some point because they think all see JURISDICTIONS on page 8 Credit: Monkey Business Images/Shutterstock

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