For Payroll Teams

Your payroll system withholds the money. Can it explain why?

PayGuard reads court-issued garnishment orders, applies federal and 50-state calculation rules, and produces payroll-ready withholding instructions with a statutory citation for every dollar. It sits in front of ADP, Paychex, or any payroll system. Not competing with them. Completing them.

What PayGuard does: it takes a garnishment order (child support, IRS levy, creditor writ, student loan, bankruptcy), identifies the employee, resolves the applicable federal and state rules, calculates the correct withholding amount, handles multi-order priority stacking, and produces a Why-Trail: a complete audit document linking every dollar withheld to a specific statute, section, and calculation step. When the DOL audits, you hand them the trail.

Become a design partner See how it works
50 states
Calculation rules covered
Zero
Calculation errors
100%
Statutory citation coverage
30 days
Design partner pilot

The compliance risk most payroll teams underestimate.

If your company fails to properly garnish an employee's wages, your company becomes liable for the employee's entire underlying debt. That is not a fine. That is a balance transfer. Plus penalties.

$10M
CFPB v. Bank of America
3,700+ out-of-state garnishments unlawfully processed. $592K in fees refunded. System reform mandated.
Source: CFPB / DOJ Settlement
$640M+
Walmart Wage Settlements
63 cases related to wage and garnishment compliance failures across multiple states.
Source: CFPB / DOJ Settlement
Full debt
Every Employer
Federal law: employer becomes personally liable for the employee's full debt if they fail to properly garnish.
Source: CFPB / DOJ Settlement

Three things your payroll team is doing right now that create liability.

Most mid-market payroll departments process garnishments with a mix of spreadsheets, ADP's black-box service, and a clerk who "knows the rules." All three fail under audit.

The spreadsheet

Your payroll clerk has a spreadsheet with state-by-state garnishment rules. California uses 20% of disposable earnings. Illinois uses 15% of gross. New York uses both. The spreadsheet was last updated eight months ago. Three states changed their rules since then. The clerk is on vacation next week.

The black box

ADP SmartCompliance calculates the withholding. But when the DOL asks why you withheld $847.30 from an employee's March paycheck, ADP gives you a number without a citation. No statute reference. No calculation step. No formula. Just a dollar amount and a trust-us. That is not an audit trail.

The priority collision

An employee has a child support order, an IRS levy, and a creditor garnishment. Child support takes priority, but only up to 50-65% of disposable earnings. The IRS levy takes everything except Publication 1494 exempt amounts. The creditor gets whatever is left under the 25% CCPA cap. Your payroll system processes them in the order they arrived, not the order the law requires.

When the DOL audits, you hand them the trail.

How PayGuard works

PayGuard is the calculation layer between the court order and your payroll system. It reads the order, applies the rules, and produces the instruction. Your payroll team reviews and approves. Your existing payroll system executes.

1

Garnishment order intake

Upload the court order (PDF, fax image, e-IWO, IRS 668-W). PayGuard classifies the order type (child support, tax levy, creditor, student loan, bankruptcy), extracts the key fields (case number, debtor, amounts, jurisdiction, effective date), and validates against known schemas.

2

Federal + state rule resolution

Given the order type, employee state, and earnings profile, PayGuard resolves the applicable rules. Federal CCPA Title III as the floor. State override if more protective (California's 20% of disposable, Illinois's 15% of gross, Texas's constitutional prohibition on consumer garnishments, Florida's head-of-household exemption). Local minimum wage lookup where required.

3

Priority stacking + calculation

When multiple orders exist for the same employee, PayGuard applies the legally mandated priority stack: child support first (50-65% CCPA ceiling), then IRS levies (Publication 1494 exempt amounts), then student loans (15% of disposable), then creditor garnishments (25% CCPA cap). Each priority level receives the remaining available earnings from the level above.

4

Withholding instruction + Why-Trail

Out comes a payroll-ready withholding instruction (dollar amount per pay period, formatted for your payroll system) plus the Why-Trail: a complete audit document that links every dollar withheld to a specific federal statute, state code section, calculation formula, input value, and result. When the DOL audits, you hand them the trail.

What PayGuard does that your current tool does not.

Whether you use ADP SmartCompliance, Paycom, a registered agent, or a spreadsheet, the same gap exists: no one shows their work.

Capability ADP SmartCompliance Paycom Manual / Spreadsheet PayGuard
Federal CCPA calculation ✓ ✓ ✓ ✓
50-state rule coverage ✓ ✓ ✗ ✓
Multi-order priority stacking ✓ ✗ ✗ ✓
Statutory citation for every dollar withheld ✗ ✗ ✗ ✓
Why-Trail audit document ✗ ✗ ✗ ✓
Calculation step visibility ✗ ✗ ✗ ✓
Works with any payroll system ✗ ✗ ✓ ✓
Local minimum wage lookup (CA cities) ✓ ✗ ✗ ✓
Self-service (no managed-service dependency) ✗ ✗ ✓ ✓

Design partner program

We are onboarding five mid-market companies as design partners. You get the full PayGuard engine for 30 days while we calibrate the rule engine against your specific state mix and order types. In exchange, we co-author a case study and you introduce us to two peer companies when the pilot completes.

30 days
Pilot
5 slots
Design partners
Zero
Payroll system changes
Request a slot

Frequently asked questions

PayGuard is a garnishment compliance engine that reads court orders, applies federal and 50-state calculation rules, handles multi-order priority stacking, and produces payroll-ready withholding instructions with a statutory citation for every dollar withheld.

The Why-Trail is an audit document that traces every dollar of employee withholding back to a specific statute, code section, calculation formula, input value, and result. When the DOL or a state labor agency audits your garnishment calculations, the Why-Trail is the document you hand them. No other garnishment tool produces this.

No. PayGuard sits in front of your payroll system, not instead of it. PayGuard reads the court order, calculates the correct withholding, and produces the instruction. Your payroll system (ADP, Paychex, Gusto, Workday, or any other) executes the deduction. PayGuard connects via Finch, which covers 220+ payroll and HRIS platforms in a single integration.

ADP SmartCompliance is a managed service that processes garnishments for ADP payroll customers. It calculates correctly but does not show the work. When the DOL asks why you withheld $847.30, ADP gives you a number. PayGuard gives you the statute, the section, the formula, the inputs, and the result. ADP is also locked to ADP payroll. PayGuard works with any payroll provider.

Child support and alimony (Income Withholding Orders), IRS tax levies (Form 668-W with Publication 1494 exempt amounts), federal student loans (administrative wage garnishment at 15%), creditor garnishments (court-issued writs under state law), and bankruptcy Chapter 13 repayment plan deductions. Each type has its own CCPA ceiling and priority level.

When an employee has multiple garnishment orders, federal law mandates a priority hierarchy: child support first (up to 50-65% of disposable earnings), then IRS levies, then student loans, then creditor garnishments. Each priority level receives the remaining available earnings after the levels above it have been satisfied. PayGuard calculates this cascade and documents the allocation in the Why-Trail so every creditor's share is traceable to the statute that determined it.

Texas constitutionally prohibits wage garnishment for consumer debts. Only child support, alimony, federal taxes, and federally backed student loans can be garnished from a Texas employee's wages. PayGuard knows this. If a creditor writ arrives for a Texas employee, PayGuard flags it as unenforceable and cites the Texas Constitution Article XVI Section 28. That flag and citation become part of the Why-Trail.

Yes. MightyBot is SOC 2 Type II certified by an independent audit firm against the AICPA Trust Services Criteria for Security, Confidentiality, and Availability. The certification applies to the full MightyBot agent platform, including PayGuard. A copy of the latest SOC 2 report is available under NDA.

A sample of recent garnishment orders (PDFs) and an employee earnings report for the affected employees (gross pay, deductions, pay frequency, state of employment). Most payroll teams can pull this in an afternoon. PayGuard connects to your payroll system via Finch (API) or accepts CSV uploads. No schema mapping work on your end for the pilot.

If PayGuard calculated your garnishments correctly and the Why-Trail gave your compliance team confidence they did not have before, we talk about a paid plan. If not, we shake hands and part ways. No auto-renewal, no lock-in, no surprise bill.

Your payroll clerk is one mistake away from making your company liable for an employee's $50K debt.

Five design partner slots. First come, first served. If your company processes garnishment orders across multiple states, PayGuard makes the calculation deterministic and the audit trail complete.

Become a design partner

Built for employer compliance

Garnishment data includes employee earnings, court orders, and debt details. PayGuard runs on infrastructure built for companies that handle sensitive employee financial data.

Security and Compliance

SOC 2 Type II Certified

MightyBot is SOC 2 Type II certified, following a successful audit by an independent firm. The certification confirms MightyBot meets the rigorous standards of Security, Confidentiality, and Availability required to process sensitive employee garnishment data, court orders, and payroll instructions. Every data access is logged; every calculation is auditable end to end.

AICPA SOC 2 Type II certification badge