WAGE GARNISHMENT COMPLIANCE
AI-Powered Garnishment Compliance Platform
From court order to payroll instruction in minutes, not days.
by MightyBot
$1.3B spent processing garnishments.
Still done by hand.
10M+
New garnishment events annually across US employers
ADP Research Institute
50
States, each with different withholding formulas, exemptions, and priorities
2-4 hrs
Per complex order: read court filing, research jurisdiction, calculate, verify, review
$350+
Average employer cost per garnishment order, rising with multi-state complexity
The cost of getting it wrong hits the bottom line
and the courtroom.
CCPA Penalties
Up to $1,000
15 USC §1674(b): Willful violation of wage garnishment limits is a federal crime. Fines up to $1,000 and/or imprisonment up to one year.
Wrongful Termination
15 USC §1674(a)
Federal law prohibits firing an employee for a single garnishment. Violation: fine up to $1,000, imprisonment up to 1 year, plus civil liability.
State Penalties
Vary by jurisdiction
California: employer liable for full wages if garnishment miscalculated. Texas: constitutional prohibition — processing a consumer garnishment is itself a violation.
Employee Lawsuits
Class action risk
Systematic over-withholding creates class action exposure. Employees can recover excess amounts plus attorney fees under state wage laws.
Audit Exposure
IRS + State AG
IRS levies require precise priority ordering. State attorneys general increasingly auditing garnishment compliance as part of worker protection initiatives.
Garnishment compliance errors are among the most common payroll audit findings. With 50 different state formulas and annual rule changes, manual processing guarantees mistakes.
A day in the life of a compliance clerk
7:30 AM
12 new garnishment orders in the mail.
8:00 AM
Opens first order. California. Pulls out the CCPA manual and state code book.
9:15 AM
Still calculating: federal cap vs CA CCP 706.050 vs ordered amount. Cross-referencing employee earnings, minimum wage, pay frequency.
10:30 AM
First withholding instruction drafted. But wait — is the employee head-of-household?
11:00 AM
Sent to supervisor for review. "Recalculate — you used the wrong minimum wage for LA County."
12:00 PM
"11 orders still in the pile."
PayGuard turns court orders into
payroll instructions.
1
Entity Validation
KYC, employee earnings profile, prior garnishment history
2
Data Source Calls
State garnishment rules API, employee earnings (Finch), geocoding for local minimum wage
3
Document Analysis
Upload court order PDF, AI extracts order type, amounts, state, case details per page
4
Policy Evaluation
Federal CCPA + state-specific statutes evaluated automatically. CA, TX, IL, FL, NY, OH — each with unique rules.
5
Withholding Calculation
Deterministic math: federal cap, state override, final amount. Every dollar traced to a statute citation.
6
Clerk Review
Human-in-the-loop: approve, override, or escalate. Full Why-Trail audit.
Three things nobody else does.
01
Why-Trail Audit
Every dollar withheld traces to a specific statute. Click any amount to see: formula, inputs, legal citation, and the exact page of the court order. Compliance officers can verify in seconds.
02
State-Aware Policy Profiles
Not one-size-fits-all. Each state gets its own policy profile. California applies CCP 706.050. Texas detects constitutional prohibition. Illinois overrides to gross wages. Add a new state in hours, not months.
03
Deterministic + AI Hybrid
Math runs as code, not LLM. $508.25 is always $508.25. AI handles audit trail coherence, edge-case flagging, and narrative generation. The right tool for each job.
Everyone processes garnishments. Nobody automates the compliance.
| Capability | PayGuard | ADP SmartCompliance | Paylocity | Manual / Excel | Paycom | UKG |
|---|---|---|---|---|---|---|
| Automated calculation | Core | Yes | Yes (managed) | No | Yes | Yes |
| Why-Trail audit | Yes | No | No | No | No | No |
| State policy profiles (configurable) | Yes | Built-in | No | No | Limited | Limited |
| Source-cited narratives | Yes | No | No | No | No | No |
| Implementation | Weeks | Months | Months | N/A | Months | Months |
| Pricing | SaaS | Enterprise | Enterprise | Staff time | Enterprise | Enterprise |
$5.2B payroll compliance market
growing at 9% CAGR
$85-112B
RegTech market by 2035
16-21% CAGR (Precedence Research, Grand View Research)
10M+
Garnishment events processed annually by US employers
$5.2B
Payroll compliance services market 2024
OpenPR industry report
$350+
Average cost per order
mostly manual labor and legal research
100,000 mid-to-large employers (500+ employees) x $12-60K/year = $1.2B – $6B addressable
Five forces converging.
1
State law complexity exploding
50+ jurisdictions, annual updates. California alone changed garnishment rules 3 times since 2023. No human can keep up.
2
Remote workforce
Employees in multiple states. One company, ten different garnishment regimes. The Excel spreadsheet doesn't scale.
3
Enforcement tightening
State attorneys general and DOL Wage and Hour Division increasingly targeting garnishment compliance in payroll audits. Garnishment errors are a top-5 audit finding.
4
LLM maturity
Gemini 2.5 Flash and Claude 4 reliably generate regulatory-grade audit narratives with statute citations. Not possible 18 months ago.
5
Industry shift
"From calculator to compliance engine" is the new framing. Payroll teams ready for automation that explains itself.
Live product. Real compliance execution.
7 compliance policies
Federal CCPA Ceiling, Audit Trail Completeness, Employee Protection Floor, CA CCP 706.050, TX Constitutional Prohibition, NY CPLR 5231, OH ORC 2716.041
3 integrated data sources
State Garnishment Rules API, Employee Earnings (Finch), Census geocoding for local minimum wage lookup
Deterministic calculation engine
Federal cap, state override, final withholding. Code-executed, not LLM. Reproducible to the penny.
Full compliance UI
Work queue, case detail with PDF viewer + page-synced extraction, policy evaluation with statute citations, Why-Trail calculation breakdown, clerk approval workflow
PayGuard is ready for
design partners.
3-5
Mid-market employers (500-10,000 employees) with active garnishment volume
90
Day pilot commitment, 2-5 payroll compliance seats
by MightyBot