Among companies processing the greatest number of child support orders, two-thirds (66%) regularly notify state child support agencies before they issue lump-sum payments to their employees. This finding comes from a survey APA conducted in conjunction with the federal Office of Child Support Enforcement (OCSE) in December.
To prepare for the survey, OCSE identified the 100 U.S. companies that process the most child support income withholding orders (IWOs). APA then identified members working for those companies and asked about their garnishment practices when issuing 15 separate types of lump-sum payments. These included retroactive merit increases, termination pay, relocation incentive payments, and a variety of bonuses.
Survey Results
From those companies regularly reporting to state agencies, 62% said they report all types of lump-sum payments. Nondiscretionary bonuses were the most likely to be reported to state agencies. Moving and relocation incentive payments were the least likely to be reported.
Sign-on bonuses, retroactive merit increases, holiday pay, severance pay, and termination pay regularly go unreported by 33% of respondents.
More than half (57%) of respondents report lump sum payments to every state in which they pay employees. The remaining 43% report only to those states requiring it. Further, when remitting withheld amounts, 82% of respondents remit the total withheld only to the responding states, regardless of whether the employee is subject to an IWO from a state that failed to respond to the notice.
Most respondents (82%) would prefer to have a dollar threshold on the reporting requirement, with 55% saying $500 would be appropriate.
Read the full article, “APA Survey Uncovers Trends Among Top Garnishees,” in PAYROLL CURRENTLY, Inside Washington, February 2019.
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