Employers Corner

New Employer Handbook

Download the "California Child Support, A Guide for Business" prepared by the California Department of Child Support Services.

Child Support Services

The San Joaquin County Department of Child Support Services is utilizing a statewide computer system, Child Support Enforcement (CSE). As of October 2008, all 52 local child support agencies are utilizing CSE, making the system truly statewide.

What does the new computer system mean to employers, our partners in collecting 65% of all child support payments in California? Essentially, the legal forms such as the Income Withholding Order (IWO) and National Medical Support Notice (NMSN) will not change as these forms are used across the country. However, the cover letter which gives directions for implementing the withholding of child support payments and /or health insurance coverage will appear somewhat different but only in format. As an employer, the actions you take are still the same - give a copy of the IWO or NMSN to your employee within 10 days and start the withholding process.

All payments will still be sent to:

State Disbursement Unit
P.O. Box 989067
West Sacramento, CA 95798-9067

If you have further questions, call the San Joaquin County Department of Child Support Services at 1 (866) 901-3212.

Child Support Program Information for Employers

Employers play a vital role in a successful child support program as 65% of all child support payments are made by wage withholding. Although the processing of Income Withholding Order (IWO) and National Medical Support Notices (NMSN) puts an extra burden on you as employers, you are helping to ensure that food, clothing, shelter, and health insurance coverage is provided for children all over the world.

The following sections should answer many of your questions about the child support program. If you have further questions, please check the Employer's subsection of our Frequently Asked Questions (FAQ). If you have a question about the meaning of a word or term, you will probably find it in the Glossary.

New options are available to make child support payments - Fast, Easy, Secure!

  • Pay using the State Disbursement Unit Website at www.casdu.com
  • Pay by phone - Call the SDU at 1 (866) 901-3212

Income Withholding Order (IWO) - Wage Withholding

Once a court orders child support, either the court or the child support agency issues a Notice to Withhold that is served on the employer of the paying parent. The IWO will list a specific amount of current child support to be withheld from the paying parent's wages each month. If there is also support owing from an earlier time period, an additional amount will usually be ordered withheld each month. The notice is mandatory and has the same status as a direct court order on the employer - including severe sanctions if the IWO is ignored.

Employers Liability

  • California law expressly prohibits employers from firing, punishing, or refusing to hire an employee because of a child support withholding order.
  • Employers who do not comply with withholding orders will be personally liable for the support and may be subject to contempt of court charges

Process

  • Employer receives Notice to Withhold and blank Request for Hearing and statement of employees rights.
  • Withholding order is effective "as soon as possible" but no later than 10 days after it is received.
  • Employer delivers papers to the employee -- a copy of the IWO, the attached statement of rights, and blank Request for Hearing within 7 days of receiving the IWO.
  • Income is withheld from each payment to the employee and sent to the address directed on the NTW within 10 days of being withheld. (NOTE: employer must report the pay date / date of withholding to ensure proper credit for the employee.)
  • Withholding continues until the employee no longer works for the employer or until the court or child support agency rescinds the order. (NOTE: Employers should hold the IWO if there is any chance the employee will return - it is still effective and binding on the employer.)
  • If employment terminates, the employer must inform the child support agency immediately of the following: employee name, child support agency case number, date of separation, last known home address, and the new employer's name and address.

NOTE: Employers should hold the IWO if there is any chance the employee will return - it is still effective and binding on the employer.

Earnings - Definition

NOTE: Earnings are broadly defined whether in the context of calculating support, withholding, or reporting by employers. (Family Code section 5206)

Earnings include:

  • Wages
  • Salary
  • Bonuses
  • Vacation pay
  • Retirement pay
  • Commissions
  • Independent Contractor pay
  • Dividends
  • Interest
  • Rents
  • Royalties
  • Residuals
  • Patent rights
  • Mineral rights
  • Natural resource rights
  • Written contract payments
  • Oral contract payments
  • Worker's compensation temporary disability benefits
  • Disability insurance benefits
  • Any other payments or credits regardless of source

Amount to withhold

Withhold the combined amount specified in the IWO -- current plus any payment on past support or other payment ordered in the IWO -- each month.

  • More than one pay period per month - how to withhold - If the employee is paid by a different time period from that specified in the order, prorate the amount ordered to be withheld from each of the obligor's paychecks. Examples for a court order that requires monthly payments follow (NOTE: if the withholding will take more than 50% of employee's net income for the month, see the section immediately following entitled "Limit on withholding amount"):
    • Pay Period
    • Monthly - withhold all of the support from each check
    • Bi-monthly - withhold half of the support from each check
    • Every two weeks
      • Preferred method -- withhold half of the support amount from each of the first two checks in each calendar month - make no deduction from the 3rd check, if there is one (unless the first two withholdings that month did not pay the full amount specified in the IWO.
      • Alternate method - If the employer's accounting or computer system does not permit withholding from some checks and not others, an alternate method which withholds the same amount from every paycheck can be used but will cause the employee and employer to be out of compliance with the court order and to incur unnecessary interest (see NOTE, below for problems created by the Alternate method.)
        1. Calculate the yearly support due
        2. Divide by the 26 ( # of pay periods in a year)
        3. Deduct that amount from each check
    • Weekly
      • Preferred method -- withhold one quarter of the support amount from each of the first four checks in each calendar month - make no deduction from the 5th check if there is one (unless the first four withholdings that month did not pay the full amount specified in the IWO).
      • Alternate method - same as the Alternate method described under the Every two weeks example above - except, at step two, divide by 52.
      • NOTE: The Alternate methods described for Weekly and Every two week pay periods will result in payments contrary to the court's order. Ten monthly payments will be less than the court ordered support and 2 monthly payments (the calendar months with 3 pay periods) will be more than the court order. In effect, an arrearage is created in months with 2 pay periods and that arrearage is caught up each six months when a month with 3 pay periods arrives. On a $500 per month order, after 5 months of lower withholding, the employer will have withheld (and the employee will have paid) almost $100 less than was ordered. At the end of the year, the correct yearly amount will have been paid but a small amount of interest will have accrued on the "late" payments.

      • Limit on withholding amount - The employer may not withhold more than 50% of the employees net income. "Net income" is strictly defined as the total owed to the employee minus mandatory federal, state, Social Security, and Medicare taxes, disability insurance, and payments to public employee retirement systems - no other deductions are allowed before computing the 50% limit. (NOTE: under certain circumstances a court can order up to 65% withholding but it is rarely done and will be stated in the withholding order if it applies.)
  • Cost of withholding -- California law allows the employer to defray the cost of withholding by a $1.00 charge per withholding pay period that can be deducted from the employees' wages. The $1.00 withheld cannot come from the support amount being withheld - but is a further charge against the employee.

Multiple withholding orders - same employee- Priority / Computing

  • One order is for support but the other is not - The support order takes priority - regardless of which was served first - unless the other order is for overdue federal taxes and the tax withholding order was served before the support withholding order, then the federal tax order has priority -- if the support order was served first, it takes priority over the tax order.
  • All orders are support orders - Add together the amount of support due for each assignment. If 50% of the employee's net disposable earnings will not pay in full all of the assignments for support, prorate it first among all the current support assignments in the same proportion that each assignment bears to the total current support owed. Apply any remainder to the assignments for the arrearage support in the same proportion that each bears to the total arrearage owed.
  • Examples
    1. Not enough to pay two current support amounts
    2. Employee's net is $1,200
      Maximum that can be withheld = $ 600 (50% of $1,200)
      Order #1 = $700 per month
      Order #2 = $350 per month
      Total = $ 1,050 for the two orders together.
      But, the most that can be withheld is only $ 600.
      To pro-rate the payment:

      First compute what percentage each order is of the total order amount.

      Second multiply the total that can be withheld ($ 600) by the percentage calculated for each order.

      Conclusion
      • $400 would be sent on Order #1
      • $200 would be sent on Order #2

    3. Enough to pay two current support amounts but only part of arrears on the two accounts
    4. Employee's net is $1,200
      Maximum that can be withheld is $ 600 (50% of $1,200)
      Order A = $ 400 current + $ 120 on past due support
      Order B = $ 100 current + $ 40 on past due support
      Sub-total 1 = $ 500 current
      Sub-total 2 = $160 past due
      Total = $ 650 current + past due
      But, the most that can be withheld is $ 600.
      Because the total current amount is less than the total that can be withheld, all of the current on each case can be paid ($400 on one case and $100 on the other for a total of $ 500).
      But, the most that can be withheld is only $600 ... and after paying the $500 current total, there is only $100 left to pay against the past due total of $160 - so, the past due payments on the two order must be pro-rated.
      As in example #1 above, to pro-rate the past due payment:

      First compute what percentage each past due order is of the total past due order amount ( $120 divided by $160 = 3/4 or 75% and $40 divided by $160 = 1/4 or 25%).

      Second multiply the total that is left over after current has been paid ($ 100) by the percentage calculated for each order: first order, 75% x $100 = $75 and, second order, 25% x $100 = $25.

      Conclusion
      • $400 current + $75 past due would be sent on Order A
      • $100 current + $25 past due would be sent on Order B

Combining Payments

  • Multiple employees with orders
    Payments for multiple employees may be combined into one payment to the child support agency if each employee and each payment is clearly designated with the employee's name, social security number, child support case number, amount of payment and the pay/withholding date. Failure to adequately identify the payments will result in improper crediting and may result in a request for sanctions for the employee and/or the employer.

  • One employee with multiple orders
    Employers may combine all payments for a single employee into one payment.

Health Insurance National Medical Support Notice (NMSN) ( back to top )

Process

  • Employer receives the NMSN, a statement of employee's rights, and the instructions of how the employee can seek to quash the order.
  • Employer delivers copies to employee, within 10 days, of the NMSN, a statement of the employee's rights, and procedures to move to quash the order.
  • If no coverage is available, employer must advise the child support agency within 20 days of receipt of the NMSN.
  • Coverage is Available upon Completion of Probationary Period: The employer should keep the NMSN and activate coverage when available. Employer should complete/return NMSN response form and advice of the effective date when insurance will be available to the paying parent (Non-custodial parent) & dependents.
  • NMSN is effective 20 days after the employer receives it unless employee files motion to quash - in such case, it is effective when resolved by the court and the employer receives notice of the court decision.
  • Employer must begin steps to start coverage within 10 days after the effective date of the NMSN.
  • Employer selects coverage - Unless the employee has already enrolled in a plan that will cover the child, the employer shall enroll the child in a plan that will provide reasonable benefits and coverage where the child resides.
  • NOTE: If the children are already enrolled in a plan through the employer or the employee has chosen a plan and the NMSN specifies a different plan, contact the child support agency for direction.

  • Employer pays the premium directly to the provider after withholding it from the employee's earnings.
  • Employer must:
    • Notify child support agency of date coverage begins.
    • Provide evidence of coverage to the local child support agency and any information, literature, medical insurance cards and /or other documents necessary to begin and maintain benefits for the children identified on the NMSN.
    • If requested by the custodial person, provide all forms and other documentation necessary to submit claims to the insurance carrier.
    • Notify the child support agency if there is a lapse in coverage, the reason for the lapse, and the date coverage is expected to resume.

No coverage available

If no coverage is available, complete and return the NMSN to the child support agency within 20 days of receipt.

No coverage now but there will be in the near future

If no coverage is available but it will become available, the employer should keep the NMSN, enroll the child when insurance becomes available, and then proceed with the required notifications listed above.

Lapse in coverage

The employer must notify the child support agency if there is a lapse in coverage, the reason for the lapse, and the date coverage is expected to resume.

Liability of the employer for noncompliance

If the employer willfully fails to comply with the NMSN, employer is liable for any costs incurred for health care services that would otherwise have been covered under the insurance policy. The employer may also be found in contempt of court and punished by fine and/or imprisonment.

New Hire Registry / Independent Contractor Reporting ( back to top )

Federal law requires all employers to report information about newly hired employees to the Federal New Hire Registry. A new California law expands this reporting requirement to include all independent contractors paid or contracted to be paid $600 or more in a year. The reported information is then matched by computers to identify those new hires against persons with child support orders. The employment information is given to child support agencies to pursue collection of support.

Employer benefits of new hire reporting

The new hire information received is also matched against disability and worker's compensation benefit data bases. This has proven to be highly effective at catching fraudulent claims and has shown substantial savings to employers in workmen compensation pay outs.

Who to report

Every newly hired or rehired employee must be reported. This includes employees of all ages, those who work less than a full day, part-time and seasonal employees, and those who discontinue their employment prior to the 20th day of work.

When to report

Within 20 days of hire (date of hire is the first date of service.) Reporting should be done even if the employee terminates before the reporting deadline.

What to report

  • Employer Info
    1. Employer payroll address
    2. Employer ID #
    3. California Employer account #
  • Employee Info
    1. Employee Name
    2. Employee address
    3. Employee Social Security
    4. Employee date of birth
    5. Employee date of hire
    6. Employee state of hire

How to report

Use the DE 340 form (NOTE: Do not submit either the W-4 or DE-6 quarterly wage reporting form.) For more information about how to get the DE 340 form go directly to the State information site - Please visit the California state web site on New Hire Registry, and the California state site on the Independent Contractor Reporting.

Where to report

To report new employees, mail or fax information to:

Employment Development Department
PO Box 997016 MIC 23
West Sacramento CA 95799-7016
Fax: 1 (916) 255-0951

Out-of-State Orders ( back to top )

Federal and California law now require employers to honor wage assignments from other states. The form used is virtually identical to the Income Withholding Order used by California courts and agencies and should contain the same information - the only difference is that the payment will be sent to an out-of-state entity.

FTB Collections ( back to top )

The California Franchise Tax Board has recently been given a much bigger role in child support collection. If a child support arrears has arisen on a case and it is not being paid down, FTB is required by law to seek all available resources of the paying parent to satisfy that obligation. Employers will normally receive either an Income Withholding Order (IWO) or an Earnings Withholding Order (EWO) from FTB. The EWO is similar to a writ of execution. Instructions for withholding will be served with the EWO.

Note: Any questions about the FTB collections should be directed to the child support agency, not to FTB.

Requests for employee information ( back to top )

Family Code section 17512
California law requires that upon receipt of a written request from the county child support agency every employer shall cooperate with and provide relevant employment and income information in their possession.

  • Relevant employment and income information shall include, but is not be limited to, all of the following:
    1. Whether the person has or has not been employed by an employer.
    2. The full name of the employee or the first and middle initial and last name of the employee.
    3. The employee's last known residence address.
    4. The employee's date of birth.
    5. The employee's social security number.
    6. The dates of employment.
    7. Current rate of pay
    8. All earnings paid to the employee in the prior tax year.
    9. Other earnings (for definition, see Family Code sec. 5206)
    10. Whether dependent health insurance coverage is available to the employee through employment or membership in a labor organization
  • No employer shall incur any liability for providing this information.
  • The child support agency shall notify the employer of the child support agency case file number.
  • The written request shall include at least three of the following elements regarding the person who is the subject of the inquiry:
    1. first and last name and middle initial, if known
    2. social security number
    3. driver's license number
    4. birth date
    5. last known address
    6. spouse's name
  • An employer that fails to provide relevant employment information to the local child support agency within 30 days of receiving a request may be assessed a civil penalty of a maximum of one thousand dollars ($1,000), plus attorneys' fees and costs. Proceedings to impose the civil penalty shall be commenced by the filing and service of an order to show cause.