Policy on Garnishment of Salaries and Remuneration Payable to Government Employees and Other Person Under Contracts for Service

Archived Financial Policies

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Date Last Revised: January 2, 2001

Please Note: This policy/document is currently under review and is being updated to reflect new procedures and terminology associated with the implementation of myEMS (SAP)

Please note that this policy will apply to both Service Canada and Human Resources & Social Development (HRSD) hereinafter referred to as the "Department" or "Departmental".

1. Policy Objective

The following outlines the financial policies relating to the garnishment of the Department’s employees salaries and remuneration, pension diversion, fees payable to contractors, excluding corporations, and remittance of related payments to the court.

2. Policy Statement

All valid garnishee summons served to the Department must be processed on a timely basis as specified by the court order.

3. Procedural Requirements

The Garnishment Attachment and Pension Diversion Act (GAPDA) provides the authority for flow of funds, which are owing to a debtor or family support to the court for payment of judgements.

Under the GAPDA Part I, salaries and remuneration payable to Federal employees and contractors, excluding corporations, may be garnished for the payment of commercial debts. Part 2 deals with the diversion of pension benefits.

The garnishment process under GAPDA part 1, is set in motion once the crown through the Garnishment Registries of the Department of Justice Canada, is served with a completed application under Part I of the GAPDA, a valid garnishee summons and a copy of the court order. (GAPDA 6(1)).

Execution of the garnishee summons falls within provincial and territorial jurisdictions. To this end, all application for garnishment of salary or remuneration must be submitted to the Department of Justice.

All applications for the garnishment of superannuation benefits covered under part II of the GAPDA, should be made to the Legal Services Branch of Public Works and Government Services Canada (PWGSC).

The Department of Justice or PWGSC’s Legal Services officials’ will check for the validity of the garnishee summons, provide legal advice and notify in writing the garnishee coordinator to take appropriate action.

Upon receipt of valid garnishee documents from the Department of Justice, the garnishee coordinator, as appointed by the Department-Personnel Services, determines if the debtor is an individual under contract for service or an employee.

3.1 Contractors

The garnishee coordinator will inform the appropriate Financial Services Unit and the administrator of the contract of the pending garnishee on the remuneration payable. All persons concerned should ensure that garnishees are expeditiously processed including forwarding a cheque to the court within the prescribed time period.

3.2 Employees

On receipt of the garnishee summons (by the Garnishee Co-ordinator), the employee is immediately notified in writing and advised that the Department will remit part of the employee’s pay as prescribed to satisfy the court order.

Deductions from employees can be processed through the Regional Pay System or Personnel Services.

4. Amendments

Not applicable at this time.

5. Policy

5.1 Salaries and Wages Payable to Employees

1. Only garnishee notices or summons received from the garnishee coordinator through the offices of the Department of Justice or designated agent of the Crown should be processed by financial services.

All creditors, who wish to serve garnishee summons to the Department, should be referred to the garnishee coordinator.

2. In circumstances where the garnishment of public servants’ salaries cannot be accomplished by payroll deduction through the Regional Pay System within the required time constraint, or when a one-time payment is involved, garnishments should be processed within the Department by Personnel Services.

3. When an employee’s cheque that is subject to a garnishee order is received by the Department, the cheque will be stamped "Non-Negotiable/Void". It should then be attached to a Source 046 Central Accounting Journal Voucher as prepared by Personnel Services and processed in the normal manner.

4. Recurring garnishment deductions should be processed through the Regional Pay System.

5. All cheques issued to satisfy garnishee summons, must be made payable to the designated creditor as specified by the garnishee summons.

6. All cheques which are payable to an employee after the deduction of the garnisheed monies, shall be given to the employee on the employee’s normal payday (where applicable), and in no case later than the last official payday.

7. All documents related to the garnishment of salaries should be processed immediately.

8. The Pay & Benefits Departement at the Regional level is responsible for the monthly reconciliation of the "Garnisheed Salaries Suspense Account".

9. An employee cannot be dismissed, suspended or laid off on the ground that garnishment proceedings have been taken.

10. Where, through an error, an employee is overpaid, the excess becomes a debt due to the Crown and may at any time be recovered from future moneys payable to the employee as salary or remuneration.

11. Underpayments to the recipients are treated as debts due to the applicant by the Department, to be recovered by increased future deductions.

12. Nominal periodic payments below $ 10.00 can be paid in arrears quarterly, semi-annually or annually.

13. All active garnishment processed in accordance with the GAPDA must terminate at the end of the month in which the recipient dies.

14. Strict confidentiality must be maintained for all actions related to employees’ garnishment actions.

5.2 Individuals under Contract for Services

All creditors, who wish to serve garnishee summons to the Department, should be referred to the garnishee coordinator.

2. Court orders for the garnishee of contractor’s remuneration payable should be processed immediately.

3. Contract payments subject to certification under Section 34 of the Financial Administration Act (FAA) are subject to the Garnishment, Attachment and Pension Diversion Act (GAPDA).

4. All garnisheed salary and remuneration must be submitted to the court within the prescribed period, i.e. for salary and remuneration fifteen days after the garnishment (GAPDA sec. 10 5(b)).

5. A confidential garnishee logbook should be maintained listing all garnishee summons to date.

6. In circumstances of insufficient funds to satisfy the court order, after consultation with the contractor, voluntary deductions should be adjusted downwards.

7. With the exception of payments made for prior work, once a garnishee summons are served, no advance payments may be made, even if called for under the contract, without approval from the Department of Justice.

8. The garnisheed cheque to the court must be made payable as specified in the court order.

9. Garnishee deductions from remuneration payable will continue until the garnishee summons is fully satisfied or the contract has terminated.

10. Confidentiality for actions related to the garnishment must be maintained.

11. Where, through an error, a contractor is paid remuneration in excess of the amount that should have been paid, the excess amount becomes a debt due the Crown and may at any time be recovered from future moneys payable to the person as remuneration.

6. Compliance

6.1 Duty to Accommodate

This policy is compliant with the Treasury Board Secretariat Policy on the Duty to Accommodate Persons with Disabilities in the Federal Public Service.

7. References

Garnishment Attachment and Pension Diversion Act
Receiver General Directive No. 1983-5R2 (to be posted on Intranet in the near future)
Financial Administration Act, Section 34
Policy on the Duty to Accommodate Persons with Disabilities in the Federal Public Service, Treasury Board Secretariat.

Appendix A - Definitions

Contractor: Any person engaged by the Department as an individual (excluding corporations) under a contract to provide services.

NOTE: "Contractor" does not include employees of companies which are under contract to provide services (e.g. cleaning staff employed by office cleaning firms) nor does it apply to corporations and individuals whose corporation rather than the individual is a party to a contract. "Contractor" does include unincorporated sole proprietorships and partnerships. Should there be any doubt with regards to the status of a debtor, the garnishee coordinator should seek further clarification from the Department of Justice.

Employee: Any person working for the Department and is paid "salary or remuneration" out of the Consolidated Revenue Fund.

Garnishable Remuneration: All monies payable under the contract to the contractor, except where a contract specifically differentiates between remuneration and expenses (e.g. travelling expenses), the specified expenses are not included.

Garnishable Salary: All payment and allowances relating to the performance of duties of a position or office, and any amount payable as allowances, special remuneration, overtime, gratuity or other compensation, termination benefit. It does not include allowances representing reimbursement for out-of-pocket expenses incurred in the performance of duties, nor non-voluntary deductions.

Garnishee Coordinator: The incumbent of a position designated to receive garnishment application from the Department of Justice and ensuring compliance with the garnishee summons.

Garnishee Summons: Includes any document or court order of like import.

Net Garnishable Salary: The net amount payable after deducting non-voluntary deductions from total salary payable.

Non-Voluntary Deductions: These are compulsory deductions as required by law. The following, though not exhaustive, is a listing of some of the non-voluntary deductions:

Superannuation
Canada Pension Plan and Quebec Pension Plan
Employment Insurance
Income Tax payments (including arrears)
Compulsory deductions for insurance, health care or other benefits
Death benefit
Disability insurance
Unions dues

Voluntary Deductions - Deductions that are non-compulsory as listed below:

Credit associations (CS CO-OP)
Canada Savings Bonds
Charitable donations
Public Service Health Care Plan
Public Service Management Insurance Plan
Blue Cross (Quebec and Atlantic Canada)
Parking deductions (up to $ 120 per month in the National Capital Region)
Additional income tax (federal and provincial)

Appendix B - Frequently Asked Questions

Confidentiality

Question 1: How should the employee garnishment documents be stored to ensure confidentiality?

Answer: A separate file for all garnishment related documents (including copies of any pay actions) must be created that cannot be co-located with other employees’ files. This file must be locked in a secure location, with restricted access to authorized personnel.

In addition, a separate file should be created for each garnishment order (i.e. if an employee is subject to 2 or 3 or more garnishments). This precaution is to ensure the retention of documents does not exceed the legal limit for each garnishment order.

Question 2: What is the retention period for a garnishment file?

Answer: The retention period for garnishment files is two (2) years after its termination. In otherworlds, if a file is in force for six years - it should be shredded after two years following the 6-year duration irrespective when the debt was paid off.

Question 3: Should a manager, supervisor or personnel officers have access an employee garnishment files?

Answer: The employee's manager, supervisor or a personnel officer outside of compensation services may not access or be told about the existence of this file.

Dates:

Question 1: When should a garnishee summon be served to the Department?

Answer: For a garnishee summons to be valid, it must be served on her Majesty (DOJ) within the first 30 days following the first day the judgement or order against the debtor is issued.

Question 2: What is the legal time limit for acting on the garnishee summon?

Answer: Her majesty is bound 15 days after the documents are served on the Department of Justice (GAPDA 6(1)). Therefore, the Department is required by law to act as prescribed by the court to the garnishee summons immediately once the 15 days period is elapsed.

Question 3: What periodic pay is affected by a garnishee summon?

Answer: All payments that becomes payable on the last day of the second pay period next following the pay period in which Her Majesty is bound by the garnishee summons (GAPDA 8) must be withheld from the employee’s pay cheque.

Question 4: What is the duration of garnishee summons?

Answer: Since execution of garnishee summons fall within provincial and territorial jurisdictions, the duration varies between provinces and court orders for example:

Funds cannot be remitted before they are deducted from the employees pay
Unlike federal employees, under provincial law, employers can be compelled to remit the money on the first of the month.
Commercial debts in Ontario usually have a duration of 6 years
In Québec all summonses are indefinite. A "mainlevée" has to be issued before the summon is no longer in force.

All garnishment related documents have to be referred to the department of Justice for appropriate legal advice and should be read carefully in order to determine the duration.

Department of Justice or PWGSC’s Legal Services department:

Question 1: What are the functions of the Department of Justice or PWGSC’s Legal Services?

Answer: The Department of Justice or PWGSC’s Legal Services officials will, upon receipt of garnishment documents perform the following:

Check for their validity
Notify in writing the appropriate "Garnishee Coordinator" (appointed by the departmental Personnel Services) of the garnishment proceedings
And
Provide legal advice as required.

Designated Garnishee Coordinators

Question 1: Who are the authorized personnel to act as Garnishee Coordinators?

Answer: The following are the authorized positions designated to act as Garnishee Coordinators:

Regional Director/Manager Personnel
Director, Headquarters Personnel Services

The incumbents of the above positions will be responsible for receiving the garnishee documents from the Department of Justice and ensuring compliance with garnishee summons.

Processing Garnishments

Question 1: How are garnishments processed by the Regional Pay System or Personnel Services?

Answer: All employees garnisheed salary deductions and payments to the court are processed through the "Garnisheed Salaries Suspense Account" that is set up in the Asset and Liability section of the Financial Coding Manual.

Deductions from employees can be processed through the regional payment system or the Personnel Services.

Regional Pay System

When deductions from the employee salary are processed at the regional pay system, the Pay and Benefits department receives a Payroll Register and Report 105 - Pay Accountability, Statement 00008, from regional pay office delineating amounts deducted from employee salaries. Deductions are credited to the "Garnisheed Salaries Suspense Account".

Upon receipt of the report, Pay and Benefits prepares a requisition for payment of the garnisheed amount. The "Garnisheed Salaries Suspense Account" is charged and the requisitions processed for return to the Department.

Personnel Services

In circumstances where the garnishment of salaries cannot be accomplished through payroll deduction at the regional pay system due to time constraints or when a one-time payment is involved, the garnishment is handled by Departmental Personnel Services.

The employee’s pay cheque is stamped on the face "Non-Negotiable/VOID." A source 046 central accounting journal voucher for the net amount of the cheque should be prepared and returned for approval to accounting operation (section 33 authority) debiting the Receiver General - Outstanding Cheques Account (Central Account Number 34001) and crediting the "Garnisheed Salaries Suspense Account".

In this case, two cheques should be issued to replace the voided cheque, one to the court for the garnisheed amount and a second one to the employee for the balance.

A requisition for two payments (replacing the voided cheque) should be prepared and processed for the amounts to be remitted to the court and employee. This procedure will offset the "Garnisheed Salaries Suspense Account".