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Attachment of Earnings Order Employer's Guide

Courts in the United Kingdom can order employers to make debt deductions from employee pay (e.g. by use of an 'attachment of earnings order').

The information in this employer's guide explains what to do if you get a priority or non-priority order and how to make payments (e.g. to the CAPS office).

When Must Employers Deduct from Pay?

A court may order you to make deductions from your employee's wages if they need to pay off a CCJ or unpaid maintenance payments.

Different sections explain more about the process of:

Note: Failing to make deductions, or intentionally giving false information about employee earnings, can result in a fine for the employer and the employee.

How Does an Attachment of Earnings Order Work?

  1. A court document will instruct the employer [you] to start making deductions from your employee's pay.
  2. You will need to calculate how much to deduct each time you pay your employee (see below).
  3. Make the first deduction the next time you pay your worker. You should then pay them their reduced wages on their regular payday.
  4. Follow that by making the correct payment to the court (e.g. the amount you deducted).
  5. It is important to stop making wage deductions once your employee has paid off the debt.

If You Get an AEO from the Court

The court will send an 'attachment of earnings order' (AEO) to the employer [you] and to the employee. As an employer, you must begin making deductions from your employee's pay within seven (7) days (or from the next scheduled date for paying them).

Note: You might get an attachment of earnings order for someone that you are not employing. If so, you should inform the court in writing within ten (10) days of receiving the order.

The court order will provide information on:

Note: You must make debt deductions from your employee's pay according to the AEO. Failing to do so is likely to result in a fine.

Changing the Frequency of Deductions

You can ask a county court to change how often you make the deductions. So, you may prefer to make weekly payments instead of monthly (e.g. to coincide with the way you pay your employee).

But, the employee would have to ask the court to make the changes if it was a magistrate's court that issued the order.

Note: There are specific rules on how the deductions affect minimum take-home pay. Hence, you would not be able to make the normal deduction if it would take your employee below the PER (protected earnings rate).

What if the Protected Earnings Rate is Too High?

In some cases, the protected earnings rate may be so high that the employer would never be able to make the deductions. If so, you should write to (both):

CAPS
PO Box 404
Northampton
NN1 2ZY

It is important to include the name of the employee, the court case number, and attachment of earnings order number in the letter.

How Priority and Non-priority Orders Work

Employers must calculate deductions differently for the two types of AEOs - being priority orders and non-priority orders.

What if the Employee has Multiple Orders?

It is not uncommon for an employee to have more than one order. In this case, you must deduct any priority orders first (and in the order that the employee received them). Follow that by deducting the non-priority orders in the order that the employee received them.

You may find it easier to apply for a 'consolidated attachment of earnings order' from the court. Doing so allows you to combine two or more non-priority orders into a single order.

Making Deductions for Priority AEO

The courts can issue priority attachment of earnings orders for the collection of unpaid maintenance payments or certain types of fines. When making deductions for a priority order:

  1. Calculate what counts as earnings for your employee (see below).
  2. Subtract the NDR (normal deduction rate) from their earnings.
  3. You can also take off up to £1 to cover some of your administrative costs (optional).
  4. Pay what ever remains of their earnings to your employee (it must be at least the PER as stated in the AEO). Carry over the difference over if you cannot deduct the full amount and then deduct it on the next payday.
  5. Send the amount that you deducted to the court.

Note: Employers must not deduct the £1 administrative cost if it will take their employee's income below the current National Minimum Wage (NMW).

Deducting the Full Amount

When making a full deduction the employer should deduct the total amount from their employee's earnings. But, this process can only occur when it does not take their pay below the PER (protected earnings rates).

When Employers Can't Make a Full Deduction

You would need to carry over the difference to the next payday if deducting the full amount would take the pay of your employee below their PER.

When Employers Can't Make Any Deduction

You must follow a different process if you are unable to make any deduction at all (e.g. your employee's earnings are below their PER).

In this case, you must inform the Centralised Attachment of Earning Payments (CAPS) office that you could not make a deduction. Do so by sending an email to [[email protected]] along with the court case number, and:

Paying Employees for a Different Pay Periods

What if you will pay your employee for a different period (e.g. not the usual one)? In this case, you would need to recalculate the PER and the NDR (normal deduction rate).

Making Advance Holiday Payments

The process of making debt deductions from your employee's pay remains unchanged when paying an employee holiday pay in advance. But, you would need to calculate different rates relating to the month paid in advance and the following month (e.g. when they get less than normal).

Making Deductions for Non-Priority AEO

Courts can issue non-priority attachment of earnings orders for collection of debts from county court judgments (CCJs). When employers make deductions for a non-priority order:

  1. Calculate what counts as earnings for your employee (see below).
  2. Subtract the NDR (normal deduction rate) from their earnings.
  3. You can also take off up to £1 to cover some of your administrative costs (optional).
  4. Pay what ever remains of their earnings to your employee (it must be at least the PER as stated in the AEO).
  5. Send the amount that you deducted to the court.

Note: Employers must not deduct the £1 administrative cost if it will take their employee's income below the current National Minimum Wage (NMW).

Deducting the Full Amount

When making a full deduction the employer should deduct the total amount from their employee's earnings. But, this process can only occur when it does not take their pay below the PER (protected earnings rates).

When Employers Can't Make a Full Deduction

You cannot carry over the difference to the next payday if deducting the full amount would take the pay of your employee below their PER.

When Employers Can't Make Any Deduction

If you are unable to make any deduction at all, inform the Centralised Attachment of Earning Payments (CAPS) office by sending an email to [[email protected]] along with:

Paying Employees for a Different Pay Periods

What if you will pay your employee for a different period (e.g. not the usual one)? In this case, you would need to recalculate the PER and the NDR (normal deduction rate).

Making Advance Holiday Payments

The process of making debt deductions from your employee's pay remains unchanged when paying an employee holiday pay in advance. But, you would need to calculate different rates relating to the month paid in advance and the following month (e.g. when they get less than normal).

What Counts as Earnings for AEO?

When you calculate payments for an attachment of earnings order, all the following will count as earnings:

But, none of the following will count as earnings when calculating attachment of earnings order (AEO) payments:

Note: Employees have entitlement to statutory pay according to employment laws in United Kingdom. Whereas, contractual pay is something agreed to 'over and above statutory pay' between employers and employees.

Attachment of Earnings Order: Making Payments

The employer will get an order for their employee from the court. It will state you whether you need to pay the magistrates' court or the Centralised Attachment of Earnings Payments (CAPS) office.

Note: You must inform your employee about each deduction you make - and in writing (e.g. any time you give them their payslip).

How to Pay the Magistrates' Court

If you send a cheque to the magistrates' court, make it payable to 'HM Courts & Tribunals Service'. You will be able to pay with one single cheque if you will be paying two (2) or more orders (providing the same court issued them). Remember to include a note about the:

Note: In some cases, you will be able to pay the court by Bacs transfer. You will need to get the account details from the court to use this method of payment.

How to Pay the CAPS Office?

You will only be able to pay by the Centralised Attachment of Earnings Payments (CAPS) office by cheque or by Bacs transfer. Thus, you cannot pay by Direct Debit or by standing order.

Paying CAPS with a Cheque

If you send a cheque to the CAPS postal address, make it payable to 'HM Courts & Tribunals Service'.

CAPS
PO Box 404
Northampton
NN1 2ZY

Paying CAPS by Bacs Transfer

You will need to use the Bacs registration form (CAPSBACS3) before paying by this method. Fill in the form and email it to [[email protected]] to register. Remember to send:

Note: You must send a payment schedule to avoid being fined. The office will return the payment back if you fail to fill in the correct information.

CAPS Contact Details for Payment

Before contacting CAPS about a payment, check you have the case number, name stated on the bank statement, your bank account number and sort code, and the payment amount.

CAPS Office
Bacs payments: [email protected]
Other payments: [email protected]
Telephone: 0300 123 1058
Monday to Friday: 9am to 4pm
Information about phone rates.

Reporting a Change of Circumstances

What if your employee leaves (e.g. stops working for you)? If so, you must write to the Centralised Attachment of Earning Payments (CAPS) office within ten (10) days, and include:

Note: Another section explains more about employer responsibilities and what to do when an employee leaves a company (or retires).

If the Court Changes the Attachment of Earnings Order

The County Court Money Claims Centre can change the normal deduction rate or the protected earnings rate for a period of up to four (4) weeks. If so, they would inform the employer in writing.

Even so, you would need return to the original PER and NDR rates as stated in the order once the four (4) weeks have finished.

If the Court Cancels the Attachment of Earnings Order

The County Court Money Claims Centre may 'discharge' (cancel) the order altogether. If so, they would notify the employer in writing about the cancelation.

As the employer, you would still be able to make the deduction if your employee's pay will be due within the next seven (7) days. If so, the CAPS office would refund your employee afterward.

Note: You would need to stop making deductions if the employee pay schedule will be due seven (7) days after receiving a cancellation notice from the court.


Making Debt Deductions from Your Employee's Pay

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