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The law requires the Alameda County Department of Child Support Services (DCSS) to serve an Income Withholding Order (IWO) even if the non-custodial party is paying on his or her own. It is intended to ensure the consistency of child support payments and is required by federal and state laws, which state that child support payments made pursuant to a court order be withheld from the non-custodial parent’s paycheck. It implies no wrongdoing by the parent. A copy of the IWO, including the Request for Hearing, should be given to your employee within 10 (ten) days of receipt and deductions should begin with the next pay date. Payments must be sent to the State Disbursement Unit within 7 (seven) days of the date of withholding. Complete instructions are included with every IWO.
What is considered income?
For the purposes of Income Withholding Orders, earnings and income include:
- Wages, salary, bonuses, vacation pay, retirement pay, and commissions paid by an employer;
- Payments for services of independent contractors;
- Dividends, interest, rents, royalties, and residuals;
- Patent rights, and mineral or other natural resource rights;
- Any payments due as a result of written or oral contracts for services or sales, regardless of title;
- Payments due for workers' compensation temporary benefits, or payments from a disability or health insurance policy or program;
- Any other payments or credits due regardless of source. You may be required to report and withhold from lump sum payments such as bonuses, commissions, or severance pay.
Are there limits on withholding amounts?
Yes. The Consumer Credit Protection Act limits deducting more than 50% of an employee’s disposable earnings (or 65% is the maximum if the employee is more than 12 weeks in arrears). Disposable earnings are those earnings remaining after mandatory taxes and deductions, including mandatory retirement or union dues. Pretax deductions, such as 401(K) plan, must be added to the employee's taxable wages before determining the allowable disposable earnings.
What if the employee is no longer employed?
If you receive an IWO for an employee who is no longer in your employ or if an employee later leaves your employ, you must return the Employee Status Report page indicating the last date of employment, last known address, and new place of employment, if known.
What if you have other withholding orders for the employee?
IWO’s for child support take priority over almost all other wage withholding orders. Child support obligations must be paid before non-tax federal debt, state and local tax levies, creditor garnishment, and voluntary assignments for loan repayment. An IRS tax levy takes precedence over a child support withholding order only if the tax levy was entered before the child support order was established.
Multiple child support IWO’s for the same employee can be confusing. The guiding principal is that you must pay in full when possible. But when it's not possible to pay in full due to limits on available earnings deduct 50% of the employee’s net disposable income. The State Disbursement Unit will allocate the payments among the employee’s California cases per State Law.
What if you fail to comply with a withholding order?
Failure to comply with an IWO is a crime and the employer can be held liable for the child support that should have been withheld in addition to civil penalties for contempt. The IWO shall remain in effect until notified otherwise by ACDCSS. An employer who fires, disciplines, or refuses to hire an employee based on income withholding is in violation of state law and faces civil penalties.
How should you handle bonus or lump sum payments?
Bonus/lump sum payments to your employee: If your employee is eligible to receive a bonus or lump sum payment please contact DCSS at 1-(866) 901-3212 (follow the prompts for employers) or contact State DCSS at 1-(916) 464-6640 for instructions on withholding.