Direct earnings attachment refers to the process of government agencies or creditors taking money directly out of a person’s paycheck to pay any debt he or she may owe.
The process involves the government authorities requiring the employer to deduct a certain amount of a salary each pay period until the debt the person owes has been paid.
DEA requirements often come about as a last resort – when employees can’t make these payments willingly or aren’t able to negotiate with the creditor. Common debts that trigger DEA include:
- Child support
- Unpaid taxes
- Court ordered fines or penalties
The phrase ‘DEA’ is commonly used in the UK. Similar concepts exist in lot of different countries – often under other names, for example:
- Earnings Arrestment in Australia
- Income Withholding Order in Canada
- Attachment of Earnings in England and Wales
- Deduction of Earnings Order in Northern Ireland
- Wage Arrestment in Scotland
How does DEA work?
The process starts with the debtor’s employer receiving a notice regarding the DEA. The notice includes how much of the employee’s salary needs to be deducted, and the duration. The order stays in effect until the debt is paid or the agency or creditor cancels the order.
How is DEA calculated?
How a DEA is calculated depends on local regulations and rules. In the US, for example, government bodies and creditors are usually not allowed to deduct more than 25%. In the UK, meanwhile, a formula is used which considers factors like expenses and income.
Dealing with a DEA notice on a global scale
Wage garnishment comes with its own regulations and procedures. These will vary depending on the country.
Employers with global workforces are faced with the added pressure of making sure they’re adhering to local regulations regarding DEA orders and are following the correct procedure.
To handle these pressures, companies need to make sure they have a system in place that makes it easy for them to navigate the various regulations and laws that exist concerning DEA notices.
A global payroll solution with expertise in global compliance can help companies navigate each DEA process and keep track of legal changes relating to DEAs.
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