ADP to handle wage-garnishing chores for employers

ADP onTuesday said it had signed up a number of government agencies and institutionalpartners for which it will electronically garnish wages and handle supportpayments on an employer’s behalf.

Toronto-based ADP, which claims to handle a quarter of Canada’s payrollprocessing already, said the money will be automatically transmitted to publicsector organizations such as the Ontario Family Responsibility Office, CanadaRevenue Agency, Alberta’s Maintenance Enforcement Program and several others.Institutional partners include BMO Nesbitt Burns, the Bank of Canada andStandard Life.

Janice MacLellan, ADP’s director of industry relations, said that theservice is in some ways an extention of the business process outsourcing workthe company already does on behalf of its clients. Besides calculatingpaycheques, however, payroll practitioners typically have to complete specialremittance forms, requisition a cheque internally and send them off to thegovernment by mail.

“We often underestimate the tasks that a payroll person has to do behind thescenes,” she said. “We’ve automated all this for them.”

As soon as a support order is made, it is automatically assigned to anagency such as the Ontario Family Responsibility Office (FRO) forcollection. The main method of collection is through garnishment of wages. Anotice is sent to the employer who then deducts a portion of those wages everymonth until the support order is satisfied.

Ontario FRO spokesman Paul Doig said FRO usually writes to the person’semployer telling them to deduct the amount. The employer must send the money toFRO, which is then passed on to the person affected. FRO receives about 1,200to 1,400 new cases each month, according to Doig.

“A potential benefit, in those cases, is that there may be a decrease insupport payment processing time if the employers choose to have ADP remit thesupport payments electronically to FRO,” he said.

In some cases the process could take weeks before the intended party getstheir money, MacLellan said. 

“Each province handles it differently,” she said. “The volume depends on thesize of the employer, but the larger it is the more likely they may receivethese kinds of orders. ”

Customers will be responsible for informing ADP if an employee’s wages areto be garnished, MacLellan added. Although ADP is in regular talks with otherprovinces, there are some which are trying to be more progressive about creatingelectronic options for payment processing, she said.

“Our third-party program has a template process for handling these types ofdeductions so it’s a bit more of a standard process.”

ADP Canada began offering third-party electronic remittance in a partnershipwith Standard Life last year that automated payroll contributions to employeepension plans and mutual funds.

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