EPY: CA Garn Rule General Change Effective July 01, 2016 Correction

(Doc ID 2176468.1)

Last updated on AUGUST 26, 2016

Applies to:

PeopleSoft Enterprise HCM Payroll for North America - Version 9.1 and later
Information in this document applies to any platform.

Symptoms

Delivered TAX Update 16-B Garnishment Withheld for CA GENERAL Rule ID is not computed correctly.

Beginning 7/1/16 SB 501 Garnishment Law Revision is favorable to more wage earners.
The amount to withhold is the lesser of:
1) 25% of disposable earnings (DE) or,
2) 50% of the amount of disposable earnings (DE) that exceeds 40 times (weekly) the greater of the state or local minimum hourly wage (SMW). (80 times for biweekly)

Expected result:
Example A: DE are $401 (weekly), 40 times SMW is $400

1) 25% of DE is $100.25
2) Excess over 40 time ($400 - $401) is $1
50% of excess is $0.50, Garnishment Deduction is $0.50

TAX Update 16-B incorrect result:
1) exemption is 75% of DE is $300.75
2) exemption 50% of 40 times SMW is $200.00
using higher exemption:
DE $401 minus higher exemption $300.75 is $100.25 ==> unfavorable to wage earner

 
 


Cause

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