As an employer, payroll or human resource professional, it’s a major accomplishment just to keep up with your roles and responsibilities, let alone the various forms and reporting requirements. ADP and the California Department of Child Support Services (DCSS) recognize the value employers provide to the child support program. In this webinar, ADP and DCSS offered valuable insight on the various filing requirements and how your roles and responsibilities help support family self-sufficiency.
- Electronic Income Withholding Order (e-IWO)
- Income Withholding Orders (IWO)
- Lump Sum/Bonus Reporting
- Reporting Terminated Employees
- Difference Between County Managed (IV-D) and Privately Managed (Non IV-D) Cases
- New Hire Reporting
- Medical Support
- Payment Options
- And More
Team Leader, DCSS
John has over 19 years of Child Support Program knowledge and experience. He currently leads the California Department of Child Support Services Employer Services team.
Manager, Government Relations, ADP, Inc.
Corrinne has been with ADP for over 18 years and currently manages the relationships and various applicable compliance requirements between ADP and agencies for child support, various types of garnishments, new hire reporting, and unemployment compensation benefits.
Kira Lee Lakin: The California Department of Child Support Services and from ADP–what employers should know about child support. My name is Kira Lee Lakin, Director of Public Relations at ADP, and I’ll be your MC for today’s presentation.
John Contreras: Well, good morning. My name is John Contreras. I’m with the California Department of Child Support Services. I have over 19 years of child support program knowledge and experience. I have worked at various functional areas within child support. I’ve worked with family law courts. I’ve been a case worker, a lead, a state hearing officer supervisor and assistant director. Currently I lead the California Department of Child Support Services Employment Service Team and we’re glad to be here partnering with ADP to congratulate and thank you, the employers, for all the efforts that you provide in child support enforcement.
Kira Lee Lakin: I’d also like to introduce Cori Flores from ADP.
Corrinne Flores: Good morning. My name is Cori Flores. I’m from ADP. I’ve been with ADP for over 18 years. I’m the manager within the agency relations organization. My team is responsible for ensuring that ADP and our clients are in compliance and we develop relationships between ADP and our state agencies. I’m also the Chair of the American Payroll Association’s Child Support Work Group as well as an active participant on the APA’s Garnishment Work Group. We present throughout the year with the Federal Office of Child Support as well with the American Payroll Association and State Child Support Agencies.
Kira Lee Lakin: Great. Now before we get started today, I’d like to go through just a few housekeeping items. Today’s webinar is scheduled to run from 10:00 am to 11:00 am Pacific Time. It is being recorded and you are currently in a listen-only mode. If you’d like to download a PDF of today’s slides, we will be making that available at the end of the presentation.
Today’s webinar is eligible for CPE or RCH credits for those who qualify and certificates will be mailed to you via email within 30 days of today’s broadcast. During today’s presentation, we will ask for your feedback via a few polling questions which will appear on the right hand side of your screen once the poll has been opened. Please click on the radio button that corresponds to your answer to make your selection.
The last ten minutes of today’s program have been reserved for Q&A. If you’d like to submit a question, simply type your question into the Q&A panel located in the lower right hand corner of your screen and then click on the Send button to send your question into our queue. We will do our best to get to all questions before the end of the program.
And lastly, we’ll launch a brief survey at the conclusion of today’s webinar so please remember that to certify, to qualify, each participant must be logged in on their own work station, answer all polling questions, and complete the survey. If you are experiencing any audio difficulties, feel free to dial into the audio bridge provided here. And again, if you experience any other technical issues, just enter a comment into the Q&A panel and our producer will respond.
Corrinne Flores: To give you a little bit of background about ADP, we have over 600,000 clients worldwide and we pay approximately one out of six in the US private sector. We electronically move over $1 trillion annually of our client-related funds and we’ve been garnishment processing since 1997. Approximately 60% of all the garnishments that we are sending out to the various agencies are sent electronically.
Across the nation you, the employer, makes a tremendous difference in the child support arena. This chart shows the various ways that child support is collected and, as you can see, by far, income withholding which employers are doing today, by far make up the greatest volume at 67%. A child support program really is dependent upon the contributions that employers are making and they do appreciate that and recognize that.
John Contreras: Thanks Cori. I’d like to point out that, in California, employers certainly do make a difference. During the year 2011 through 2012, approximately 70% of all (inaudible) collections came from you, the employer. That resulted in $1.46 billion being collected for California’s children and families and, on behalf of the California Department of Child Support Services, I’d like to say thank you very much.
So today’s topics that we’ll be covering include reporting new hires in California, independent contractors, quarterly wage, terminated employees, income withholding orders and the differences between the county or 4D orders and private cases or non-4D orders, electronic income withholding order processes, medical support, recording lump sum bonuses, late payment options available to you, how you can stay connected and how you continue to help us. And some time afterwards for Q&A.
I’d just like to point out that it is through your efforts that we are able to make these connections with families and, as an employer or payroll or human resource professional, it can get kind of confusing with all the regulations and the roles and responsibilities that you have and all these forms and reporting requirements that you also have in front of you. So hopefully, by the end of this presentation, we can tie together all the requirements of these forms and responsibilities and provide you with a greater understanding of your role in child support enforcement.
Kira Lee Lakin: Great. Thank you, John and Cori. Before we dive in here, let’s go through our first polling question. So during 2011 and 2012, how much child support collected in California came from employer withholding? Again, you should see that polling question pop up on your window and the choices are A, approximately 40%, B, approximately 52%, C, approximately 70% and D, approximately 74%.
And we’ll now move into our reporting section.
Corrinne Flores: So let’s take a look at new hire reporting. So the Personal Responsibility and Work Opportunity Reconciliation Act or PRWORA of 1996 required employers to report certain information on their newly hired employees to a designated state agency. Now federally, that’s what PRWORA did. It mandated that states open up a program that allows the employer to report their new hires. But states may establish more stringent reporting requirements. If you want information specific to the various states of the state contacts, that information can be found at the Federal Office of Child Support’s website and I have included the link there.
Some states have actually passed legislation that required the reporting of independent contractors as well. Penalties can be imposed for failing to report your newly-hired employees. And if you’re a multi-state employer so you’re not just located in California, you have locations across the United States, you can opt or elect to report all your new hires to one specific state. To do so, you actually must register and advise the Federal Government on the form that I have listed, OMB, which is the Office of Management and Budget, form 09700166. So once you do that registration and designation, you can report your newly-hired employees across the United States to one specific state.
The most recent changes to the new hire program included the Trade Adjustment Assistance Extension Act of 2011, and what that actually did was it really clarified the definition of a newly-hired employee. There was a lot of confusion in a very grey area in regards to rehired employees. So what this act did was it clarified that an employee who has not previously been employed by the employer or an employee who was previously employed by the employer but has been separated from such employment for at least 60 consecutive days, is designated as an employee that you must report as a newly-hired employee. So the act actually clarified what the definition of a rehired employee was.
John Contreras: So in California, with starting new hire and independent contractor reporting, you are required to report your new hire within 20 days of their start work date. For independent contractors, it’s within 20 days of a new contracting, if the following statements apply–you’re getting a 1099, you’re paying them more than $600, they’re an individual or sole partnership.
Now these forms that you complete for new hire and we’ll go into it a little more in-depth as we proceed through, but all the information they provide, whether it’s your Federal Employee Identification Number or FEIN and information about your employee name, Social Security number, physical address and salary, all that information is processed at a national level through the Federal Parent Locator Service. That information is also provided through another federal database called the National Directory of New Hires which, of course, receives the information from the new hire forms that you complete.
That information is run against a Federal Case Registry which all the open and active cases throughout the United States. So its data fields that you complete on the following forms including new hire are processed through these various federal databases at a national level. Where there are matches on Federal Employee ID number or Employee Social Security numbers, all that information is disbursed out to the various states where there is a case involving that participant or perhaps an employment record in a database regarding a new employee. So this is a rather a large and complex system in which all the data that you provide on these various forms come in to play to help the child support program enforce on Income Withholding Orders and other actions.
You can report new hires electronically through the California Employment Development Department at their website that you see on the screen and independent contractors electronically by that same web link.
So what you see before you is the California Employment Development Department’s paper form of a new hire reporting and I want to bring your attention to the highlighted fields. And in California, the Child Support Enforcement System is really based on FEIN identification. So where it says Federal Identification Number, it is really important–critically important– that you consistently report all nine digits of your FEIN and do not leave any numbers out or do not leave it blank. And that’s a critical piece of information for when incoming data through the National Directory of New Hires hits a match in our database. If a FEIN is not there, it may think that it’s a new record, a different business and could create a duplicate entity of your business and result in delays in getting documents out to you or your employees.
Business name, contact person and telephone number, I believe in the EDD or Employment Development Department’s handbook, by completing these forms, they state to put your business name. Our system operates on the legal business name. So it would be very helpful if you, the employers, or those within your office who complete these forms, to please put your legal business name. A contact person name and phone number just helps us in the event that we need to reach out to you to obtain any information that would be helpful to maintaining any integrity in our database.
When you put the employee’s information there, their Social Security number, their address, city and state, that just helps us with our locate functions and case management. We match participants by their Social Security number and names and any mismatches can result in some sort of a task or an action that a case manager may need to take to verify that the individual being reported is truly an employee of the business that is being reported also.
On the next form, this is the Quarterly Wage Report, a paper version. Again, there’s your Employer Account Number which, in this case, is referencing the State Employee Identification Number that would be provided to you and the Employer through California. Again, we want to stress the use of the legal business name rather than just your business name as it may appear on your shop window or other documentation you may have. And also, again, the FEIN is down there. If you have more than one, it lists the additional FEINs. So I cannot stress enough how much the FEIN number for your business is critical to our matching logic that identifies you in our database as a unique employer rather than creating duplicate employer records.
I just want to provide a brief example that perhaps your legal business name is LDN Incorporated but one day the form gets completed and it’s just legal business name LLC for whatever reasons. And there’s no FEIN. All the other information might be the same or similar. When that data comes in through the national directory out to California’s support enforcement database, the system might think you’re a new record and it added as a new employee record in our database resulting in a duplicate record, causing a delay in getting documents to where they need to go in a timely fashion. So I cannot stress enough the use of all nine digits of the FEIN consistently and your legal business name.
This is just a continuation page. I want to show you, again, where it has information regarding your employees. This time it has the total subject wages. That information, when it comes through the system, can be used for support enforcement purposes that determine an accurate child support order when they’re trying to establish a current support amount. It might be a key or an alert that perhaps a modification needs to be done whether it goes up or down on this participant’s record. So all the information you provide on these forms are used by the system and by case managers to either identify an action that’s needed to be taken by a case worker, or providing information about your employer record in our database that helps to keep it accurate and streamlined or may create a duplicate employer record in our database because of the lack of a FEIN or legal business name.
So how do you report these entities? Well, there’s various ways. You can see the addresses on the screens to the employment development department in California. In Sacramento you can do it by mail, you can do it by fax, or you can go their E-services website to do it electronically. Now, of course, if you need any assistance you can always call their Taxpayer Assistance Center at 888-745-3886.
Now this form is unique to California, I believe. It’s called an Employer Information Request form. It was a form that we designed here at the California Department of Child Support Services. And we use it to try and keep our database in a pristine fashion. So when–if you’re an employer and you receive this form, what we’re providing you on the left hand side of the form is the information as it is presented in our database. On the right hand side we would ask for you to complete it with any corrected information. So again, you can see that we have employer legal names. So we may have your business name as one thing but we really need your legal business name. We may have the address where to send payroll and garnishment information as one address but it really needs to be another one. So we would ask you to update that information.
The same with health benefits. So it’s an opportunity for you to provide us information to correct any errors in employer records in our database. That CSE employer number at the very top is a number assigned by the CSE or Child Support Enforcement database. It’s assigned to you, as an employer, and it just helps us to identify your record as it was presented in the database. You may get these through the mail. You can respond to them by email. They come with a Submit button if you choose to go to the electronic version on our public facing website. You can complete the form there, hit Submit, and it comes to an inbox at our state office and that information is processed and updated accordingly.
Kira Lee Lakin: That brings us to our second polling question which you should now see pop up. In California, how many days from the start to work date does an employer have to report a new hire? The choices are A, 10 days, B, 15 days, C, 20 days and D, 30 days. I’ll just give everyone a few seconds to respond to that. Okay moving on.
Corrinne Flores: We’ve reviewed what employers are required to do when they hire an employee. Now let’s take a look at a requirement should you have an employee that had a child support order and they no longer work for you. If you’re a multi-state employer so you have multiple locations across the United States, you should notify the various child support agencies that we’re sending payments to. This does a couple of different things. It helps prevent future issues for you, as the employer, the non-custodial parent, and the custodial parent. And it really eliminates any additional follow-up that may be placed. If an agency is expecting a payment and has been consistently been getting payments from you as the employer and they no longer receive payment, there will be additional follow-up that the agency will do to say what happened to this employee and where are the payments?
Now John’s going to take a look at what California requires in regards to terminated employees.
John Contreras: Fortunately not anything all that unique. The section of the screen you see there is from an Income Withholding Order and, of course, that’s on a federal form so I want to believe that it’s consistent across all states. And you don’t need to use this particular piece of the Income Withholding Order to report a terminated employee. It’s there as a convenience but it’s just as easy to pick up the telephone and call the county that’s managing the case and let them know. Or you can do a hand-written note. But this is a convenient section of the Income Withholding Order itself.
And this is very critical information. You can indicate whether that employee has ever worked for you, never worked for you, or no longer works for you. It’s not totally uncommon for the system to send out Income Withholding Orders to employers that have never heard of the person being referenced on the income withholding order. Providing it’s a termination date and last noted phone number, that’s just helpful information and case management. The number helps us to contact the non-custodial parent or the employee in the event that we need to do some follow-up effort. The last noted address also helps with any locate actions that may be needed to be taken by the case manager.
The new employer name and new employer address. If you know the new employer of your ex-employee, that is very critical for us in our case management. It would allow the case manager to issue an Income Withholding Order to the new employer and certainly verify with that new employer that the employee does indeed work there.
I just want to note that no employer shall use an Income Withholding Order as a ground for refusing to hire anyone or for taking a disciplinary action against an employee. So again, this is another piece of information that you, the employer, can provide to the case workers or the counties managing these enforcement actions. It’s very helpful and helps us maintain our case actions timely.
If you need more assistance regarding employer information and responsibilities, you can call the DCSS Employer Customer Service number at 888-898-1743 and one of our employer services staff will be glad to help you. Or you can go to–respond to our Employer Information Request form at the hyperlink you see in the screen. That will present that Employer Information Request form to you and you can respond to the paper document online.
If you have any other questions, you can reference our Employer Resource Center which has recently been updated to make it more user-friendly. It’s organized a lot more user-friendly. And that’s the web address of it right there. And if you have any questions regarding EDD or the Employment Development Department offices regarding new employer hiring and the contractors recording (inaudible), you can contact the new employer registry hotline at 916-657-0529.
So Income Withholding Orders. Excuse me. These are an order issued by the court and it arrives out of an action by parties who go to have a child support action taken. The parties can represent themselves or they can hire an attorney to represent them, or one of the two parties may choose to a local child support agency and have that agency enforce their case for them. Typically, an action will go to court. If necessary, they’ll establish paternity, they’ll establish an amount for current child support and, where appropriate, arrears. And out of that order an Income Withholding Order will issue.
So it is one of the most effective methods for child support collection. It is a court-ordered deduction as is medical support from the non-custodial parent’s income. The employer is instructed to deduct a specified amount each pay period and send it to the California State Disbursement Unit and we provide you with the address to this account from your State Disbursement Unit as well as the customer service number on the screen.
Corrinne Flores: States are actually mandated to implement and use the Federal Income Withholding Order or IWO. They can alter it slightly but it truly is based on the OMB Form 0970154. If you want to see or access a sample of the form, the link is provided there for you.
The IWO must be reviewed every three years so, at a federal level, that document is reviewed and revisions are made. 2011 was the last revision and it included some standardizations that really affected and impacted employers that became effective 5/31/2012. And the two major changes that the 2011 included was that payments must be directed to the State Disbursement Units within the various states. So if you, as the employer, are receiving an order and it’s directing you to send the payments to the custodial parent or to an attorney, you have the right to return that order and say the order should be directing us to send these payments to the State Disbursement Unit. And the Federal Office of Child Support actually encourages employers to do that.
The second major change that impacted the employer community was the order that you’re receiving must be on the federally-approved IWO. So if you’re receiving a divorce decree or any other type of order that is not based on that federal form, again, you are able to return that to the sender and say, I need this order to be sent in compliance with the federal order. So those are two major changes for employers.
The next revision to the form will be in 2014 and the discussion and feedback is already starting to occur in preparation for the 2014 revision.
John Contreras: So what are the differences and the similarities between a county-enforced order or 4D and a private order or non-4D case? Well, as I said earlier, parties will go to a court and they will either have an Attorney of Record or they will go and represent themselves, or they may get the local child support agency to represent them. And they’ll get an order and out of that order comes an Income Withholding Order. As we stated earlier, the Income Withholding Order itself is a federal form. So whether you’re a private non-4D case or a county case, you’re still using the same federal forms for the Income Withholding Order that gets sent to the employer and, in some cases, the State Disbursement Unit.
As an employer, or actually as a state employee, I’ve gotten calls from employers as to what the differences are between them and how can you tell? Well, I’m jumping ahead a little bit. Doggone it. So let me back up here. So what’s the difference and similarities? Let’s refer back to this matrix here. So with an employer, within 10 days of receiving the Income Withholding Order, you must notify the employee that you have the order and provide them with a copy of the order. As the employer, you must remit payment to the SDU within 7 working days of the pay date of the withholding and send your payments to the State Disbursement Unit.
On a non-4D order, the private party, the Attorney of Record, will provide you with the Income Withholding Order. You should keep the original and send a copy to the State Disbursement Unit. What the State Disbursement Unit does is take that information and open a shell case, as I’ll refer to it, in our Child Support Enforcement computer system. And then the SDU will send you, the employer, a letter with a case number on it. It is very critical that, when remitting payments on the non-4D cases that you include this case number because it is a key piece of information to help them process the payment ensuring that it gets to the right party in a timely fashion. So it says there, the SDU, by return mail, provides a case number that must be included in all payments for that case.
And I would just like to also include, on 4D cases, there are payment coupons that you can also use to make payments. The SDU will take checks. They will take electronic payments and, again, all payments are made through the California State Disbursement Unit.
So as I was starting to jump ahead a little bit earlier, so what is one of key ways you can tell the key difference on a single federal form whether you have a private case or a county-managed case? There’s a section, I believe, on page three where it has contact information. It says, to the employee Income Withholding Order–income withholder, if you have any questions, contact. In that section, if it’s a 4D order, it will always have the California Department of Child Support Services as the issuer name. Where the phone number is listed, it will always have our Customer Service Call Center number 866-901-3212. And it will always have the California Child Support website listed.
If it’s a private order, then it will have the contact information regarding the Attorney of Record or perhaps the person who initiated the action, obtained the order and had the Income Withholding Order issued. It will have their telephone number which will not be an 888 number, typically. It may have a fax or not and they or may not have a website.
In the section where it says to the employee (inaudible), it will probably have the contact information of the person or attorney of record issuing and their phone number.
So that’s the most basic way, I’ve found, to be able to tell the difference between a non-4D and 4D Income Withholding Order because they’re all in the same format, same form. So hopefully that’s a little piece of information that will help you know the difference.
Also, when a child support action is initiated and enforced by a county agency, they will enforce current child support arrears and spousal support. However, once the order for current–once the obligation for current and arrears is completed as a spousal support-only case, they will close that case because the local child support agencies in the State of California do not enforce spousal support. It is not a reimbursement act for the state.
So on a spousal-only order you will see a form such as the one on the left, a family law 435 Earnings Assignment Order. Down there midway on the form you can see a–it says that an Earnings Assignment Order for Spousal or Partner Support. So if it’s a spousal-only order for Income Withholding Support, that’s the form you should be seeing. Otherwise you would see the form on the right which is the Federal Office of Management budget form for Income Withholding Orders. It’s a standard form. It could have spousal current and arrears to be enforced. But once again, once it becomes a spousal-only support order, the county agencies would no longer enforce that action. So hopefully, those will help you identify them visually.
And then I might have slipped and mentioned something about EIWO–and maybe I didn’t. So what is the new Electronic Income Withholding Order? Well, it’s a means to process Income Withholding Orders electronically. It reduces paper. It saves time. A paper order, typically, has 60 pages. It’s got a copy for the employee, it’s got a copy for the employer, it may have a National Medical Support Notice and the two attachments to respond to that document. So there’s just a lot of paper to process and it’s very costly. Doing it electronically reduces the paper immensely. When you pull down an electronic version of the Income Withholding Order, it’s three pages and that’s it. And because it’s an electronic version, you can choose to save it to a folder on your computer, or you can print it out to provide copies to your employee. We can do terminations and lump sums through the electronic Income Withholding Order process and you respond to these electronic orders acknowledging receipt of that data and the states know that you have received that Income Withholding Order electronically.
It is FEIN-based so, should you choose to participate in electronic Income Withholding Orders, you would contact Bill Stewart whose information is coming up. He would go over the ins and outs of participation and it is FEIN-based so, if you happen to be a rather a large entity with many FEINs underneath your top-level of employment, then you would only identify those FEINs you wish to use for electronic Income Withholding Orders. Those FEINs, once they’re implemented when matched against the FEINs in our database and any employee that is associated to that specific FIWO FEIN would have all their documentation regarding Income Withholding Orders sent electronically.
So the benefits of the IWO. Well, it increases collections in the respect that the process happens a lot faster. So we’re getting the Income Withholding Orders and the remittances back more timely and a lot quicker. It reduces your administrative expenditures. There’s no postage, there’s no paper, there’s no handling. It’s all done electronically. It reduces your processing and handling costs and frees up time for your employees who may spend an inordinate amount of time manually processing these paper orders.
These are the (inaudible). Bear with me. We have to log back in. Thank you very much. The improved communication between Child Support Agency employers in that it’s a very static process. The fields are definite for specific types of information. So it’s always going to be consistent. It’s a uniformed format and it does reduce errors because, once you’ve completed that file format layout, it doesn’t change. And you can choose to no longer participate at any time.
So there are two options to receive acknowledgements. There is the PDF or Pretty Darn Fast acknowledgement option or the XLS or Extreme Lightning Speed option. So here you see a version of the PDF sample. Now it’s a very simple process. You review all the information that’s on the PDF acknowledgement. If it’s correct you just validate and save and it sends the acknowledgement out to the state. Or you can reject it if there’s any errors and we get the reject notice and research as to why it was rejected.
The downside for this process is, if you’re a large employer with many employees who have child support orders, you have to review each form individually for each employee with a child support order. So if you have, like, 50 or 100 or more employees with child support obligations, you’d have to go through 50 or 100 of these forms individually to validate the information. But if you’re a small business with a handful of employees, this may just suit you just fine.
This is the XLS acknowledgement sample. It’s a–as you can see, an Excel spreadsheet. It will put all your employees on a single page. You just view each column and each row for accuracy. You indicate whether it’s accepted or rejected on the far right in column K. If everything is appropriate you just hit Save and Send and you’re done. It’s all on one piece of page, so to speak, so there’s no multiple pages to sift through if you have large employees–large employers.
Corrinne Flores: So ADP has been involved with EIWO since it was originally created. And we’ve been active participants and helped with the creation of the file format. It’s available currently to ADP clients using garnishment or comprehensive services. ADP elected to develop and use the system-to-system format so we go out to the central portal. We pick up the files and it comes directly into our system and then on to our client system. Clients actually authorize ADP to receive the EIWOs and that’s done through an authorization process. And then ADP is responsible for transmitting the client’s Federal ID numbers and information to the portal. The portal then filters that information out to the states and then we receive the XML files through the portal for all the various states that are currently on the EIWO process.
We are responsible for all the development and maintenance so, as John mentioned, once the format is created, it’s a standard format and so, as states join the EIWO service or process, it’s completely seamless and those states begin to send and receive the information. However, any revisions, because as you know and as we talked about, the paper IWO has to be revised every three years. If there are major changes that will require the electronic version to be changed, ADP is responsible for making those development changes. If you, as an employer, did the system-to-system or implemented EIWO, there could be changes that would need to be made based on those paper revisions.
With EIWO, what ADP has experienced is like many of you I’m sure. We really want to make sure that our confidential and personal information of our clients and their employees is kept very secure. So we felt that moving to an electronic version of transmitting this data with firewalls and all the additional security measures was really a huge benefit of moving to an electronic version of the IWOs. Also, there’s just faster turnaround time all the way around. So faster turnaround in getting orders processed because it’s coming directly into the system, there’s no manual intervention involved. There’s an increased accuracy because, once we’ve mapped all the various fields, it’s a standard process. There’s no deviation. And ultimately, we did experience a reduction in calls not only from custodial parents, non-custodial parents, and state agencies asking for the status of orders and payments, we experienced a huge reduction in those type of follow-up calls as we implemented EIWO.
John Contreras: I’d just like to add, very quickly, that I happen to be the State of California liaison for EIWO so another feature for this process is there’s just one contact for your questions. So if you have a question about an electronic withholding order that you received from the State of California and you have some questions about the information that you received, or you received a paper order and sent out an electronic one, I’m the single contact for that. You don’t have to figure out who do I call to get a resolution. Just one contact and it’s that simple.
Corrinne Flores: And John’s correct. So there are specific contacts within each state. So if you’re a national employer, there is contacts that you know directly who to call regarding any of your EIWOs, and so many employers as well as ADP found that to be a tremendous process improvement in efficiency as well. And ultimately, payments are disbursed to the families faster. We’re all focused on getting the payments to the children, in getting the payments processed, and this has been a huge benefit.
So on the national level, as of June 30th 2013, the EIWO portal processed over 1.6 million orders. That’s a huge volume transmitting through the central portal, and not all states are up yet. So we continue to believe that this is the right direction to go into and so, if you are truly an employer that interested, this has only been benefits as part of this process.
The next slide includes the current states that have implemented EIWOs so they are sending and receiving those documents–or that file electronically through the portal. The states in red are the ones that are currently in development and, as side note, the ones that are currently in white, the legend indicates they are currently not sending or receiving the EIWO. For those states it has not been the feedback that they’re not interested in going in the direction of an electronic Income Withholding Order. It truly has been they needed to get the resources and the IT resources in order to implement this process. So we do feel that, ultimately, all states will be able to receive and send electronic IWOs.
John Contreras: So if I can add on to that, that as of July 1st, 2013, there are 488 companies comprising 4,808 unique FEINs participating in EIWO. If you have any more questions or have an interest in participating in the electronic Income Withholding order process, you can contact Bill Stewart. His email address is on the screen as well as his phone number, area code 518-399-9241. He’ll be more than happy to address your questions or concerns and direct you to information that would help you understand the EIWO process more accurately.
So medical support. As I indicated earlier, medical support is also a function of a Child Support Order or a court order. It’s treated just like Income Withholding for garnishments of your wages. It’s a standard court order. And if you have any additional questions about medical support, we have an FAQ at the link that you see on your screen there before you.
Medical Support Orders assist children in getting medical insurance. So the courts typically will order medical insurance if it’s at a reasonable cost and is available through the employer. So those are debatable terms of what is reasonable. I believe in the package you receive for an Income Withholding Order, there is a Notice of Hearing, I believe it’s called, to quash the Income Withholding Order and medical support if the employee feels that it is an action they choose to take. As of–you can see on the screen–has an average of about 31% satisfying the Order for Medical Support. Well, I think I’m–
Corrinne Flores: From an employer perspective, we do know and we do hear consistently that the calculation can be complex. So the National Medical Support Notice may instruct the employer to either take a flat dollar amount which is relatively easy. You include it in the calculation for the maximum withholding limits and you collect that money from the wages.
Where it gets to be a little more difficult and confusing is when the order is actually instructing you, as the employer, to enroll the child in the medical insurance. Some of the things that employers have expressed to the various states as well as to the federal Offices of Child Support, do I include the entire premium amount? Do I include just the amount for the child? And that premium amount needs to be calculated back into the maximum withholding limits so the states and the Federal Office of Child Support have heard employers’ concerns about the complexity of that process and are really focused at looking at what they can do to assist in making that an easier process.
Additionally, with the National Medical Support Notice, there may be additional answers or responses required that you, as the employer, weren’t accustomed to getting, maybe five years ago. And with that increased volume, that’s additional responses that you were not previously having to process and so that, again, is an additional resource increase that you may be experiencing.
And just as a side note, there may be civil penalties that could be applied or assessed against the employer for non-compliance and so what we typically hear is if you have a question regarding the Medical Support Notice and you’re unsure as to what to do or there needs to be clarification, call the sender that sent you that notice. They’re always willing to help and making sure that you’re doing the best thing that you can for a child in getting the child enrolled. So I would say make those calls.
Kira Lee Lakin: Great. That brings us to our third polling question. What benefit can be realized with EIWOs? We have four options here. A, reduced processing and handling cost and time for employers, B, improved communication between child support agencies and employers, C, increased child support collections, and D, all of the above.
Corrinne Flores: Okay. Now let’s talk a little bit about lump sum payments and what employers are required to do in regards to them. Some states actually require employers to report that they will be making a lump sum payroll, such as a bonus payroll, prior to actually paying their employees. This allows a child support agency to confirm whether or not the employee owes delinquent child support obligations and then, what the agency will do is issue a one-time withholding order instructing you to withhold on that lump sum payroll.
Many states have actually passed legislation so 14 states, specifically, have passed some sort of legislation or requirement that employers must adhere to when they’re getting ready to pay out a lump sum payroll. Ten states actually require the reporting as part of their state policy or procedure and some states are very specific in regards to the timeframes in which you must notify them. If you’re a national employer, requirements vary by state. And again, on the federal Office of Child Support’s website, there is a matrix that provides that.
And on the next slide it’s actually a chart that instructs the employer or advises them as to which states require reporting, which states require as part of their policy or procedure, and which states today don’t have any specific requirements in regards to lump sum payroll.
John Contreras: So as you saw the policy here in California is that employers contact the California Department of Child Support Services regarding a lump sum payout. So as it says there, a bonus and lump sum payment that is made to employers is considered income. They are subject to a garnishment for past due child support and pleased to report them prior to a payout. California Family Code Section 17512 requires employers to report all earnings as defined by Family Code Section 5206. These include wages, salary, bonus money and benefits as well as any other payments or credits due or becoming due regardless of the source. So please report your lump sum payments either to the county managing or directly to the California State Department of Child Support Services.
So some examples of bonus or lump sum payouts are severance, vacation payouts, insurance settlements, retirement incentives, rewards or payments as a result of verdicts. And we have three ways that you can report the lump sum here in California. We have an email address that goes to our Lump Sum Group or you can call them directly at 916-464-6640. There is a debt inquiry service through the Office of Child Support enforcement much like the EIWO portal. You can go to their web link there to see what it takes to participate in the debt inquiry service. And you can always participate also through the electronic Income Withholding Order process. If you’ve ever noticed on the top form itself, there is a check box for a lump sum payment that would be issued out to the employer to garnish those wages.
Kira Lee Lakin: Great. Thanks, John, and thanks, Cori. We have our fourth polling question here. According to California, when should bonus and lump sum payments be reported? We’ve got just three options. A, prior to payout, B, after payout or C, at year-end. Thanks to everyone for taking just a moment to respond to that question.
Okay, and we’re moving on to payment options.
John Contreras: Well, thank you very much. As I spoke earlier, there are some California codes regarding payment. California Family Code 17309.5. If you are an employer and you’re remitting your payments to the State Employment Development Department or a Franchise Tax Board electronically, then you must also remit your child support electronically. The California State Disbursement Unit, I’m sorry, offers a dedicated team of professionals that can support all aspects of child support payment processing. You can contact them using any of the following team methods. You see the customer service phone number presented, 866-901-3212, and they have an email address that you can email them for assistance also.
So some of the payment options that are offered are the–and I’m no expert here–EFT through the ACH Automated Clearing House network. You can log online at the web address presented and you can create a profile regarding your business and set up an account or means to do your payment options. Or you can send checks to the address below.
Unidentified Participant: You can also pay by telephone.
John Contreras: You can also pay by telephone. Interesting. So you can set up your accounts online and cease writing all those checks and do it electronically.
Corrinne Flores: So at ADP we felt that EFT was a great option. It’s a standard format so, as John mentioned, the Automated Clearing House created a standard format specific to use for child support payments and so states really cannot deviate from that format. Once you have the employer develop the process in order to be able to send EFT, it is seamless as you implement with other additional states. Correct payment information is the key so there are very standard fields and so, to ensure that payments are processed seamlessly, key and correct information needs to be implemented when you’re interpreting those orders.
Sixteen states have actually passed legislation that mandates employers to send their payments electronically. So as John mentioned previously, in California, there’s the Family Code that says if you’re sending electronic payments to the FTB or EDD, you would need to send your payments electronically for child support as well. So there are very specific mandates that have already occurred in 16 states. We try to send as many payments electronically as possible, again, because there are so many different benefits in securing information and sending an electronic version.
Some of the benefits that we’ve experienced, again, the Social Security number information. Sending that through snail mail is of great concern to us so we appreciate the fact that we can send this information in an electronic file where we know there are definite security measures, firewalls and encryptions that occur. It also reduces the chance of errors or unidentified payments as well as reducing internal manual processing so we’re not having to cut the checks, we’re not having to pay for the postage. Once the initial development effort was completed, we were able to begin sending payments to various states through this method. And again, the standardized process, as we began to implement with additional states once we got the first couple of them up and running there was no additional development effort needed. And ultimately payments are disbursed to the agencies faster and, again, I think all of us as the employer community, really, the ultimate goal is getting the payments to the family faster and EFT definitely does that.
John Contreras: So how can we stay connected? Well, you can subscribe to the California Department of Child Support Services quarterly newsletter. You see before you our fall and spring editions have already gone out. If you go to the web link there on the screen, you can enroll and receive these through your inbox on your email and stay in touch with what’s going on in the world of child support enforcement.
We’ve also, as I stated earlier, updated and revised our Employer Resource Center on our web page. It’s organized topically with the tabs at the top. You can hit the Quick Links on the screen there for any information you need for helping you determine your roles and responsibilities as employers, references to Quick Reference Guide, the handbook, EIWOs, the Employee Information Request Form, and new hire reporting.
You can go to the area where it say Employer Email Subscription and enter your email address in the field below and hit Submit and enroll into receiving our quarterly newsletter. We have Events on the bottom left, a calendar so you can see that any up and coming events that you may want to attend if they’re in your area or if it’s a webinar that you want to participate in.
Also, if you have issues and you need to speak to somebody to resolve a payment issue, there are some phone numbers and email addresses that will help you resolve any repayment issue you have, whether it’s how to send a payment, to get a refund, replacement payment, stop payment, errors. That’s all the information and contact information right there in one place. It’s also on our Employer Resource Center page.
So how do you help? Well hopefully I’ve covered that well enough to help you understand the importance that your role plays, that if you consistently provide the information on the forms that we discussed earlier–quarterly wage, new hire reporting. If you do it consistently, then we can maintain our integrity on the database of your employment record and keep up with our case management regarding our employee and non-custodial parents, report new hires within 20 days, be consistent with reporting your FEIN and company legal name, comply with Income Withholding Order and medical support obligations. We are here to help. So please, stay connected with us by subscribing to our Employer Subscription.
If you have any other questions, you can visit the Employer Resource Center to find all the topics and questions and answers and FAQs. Or you can call us at area code 866-901-3212.
Kira Lee Lakin: Thanks so much, John. So here is our final polling question. We’d like to know what percentage of your employee base is currently subject to child support withholding. If you could just take a moment to let us know what you’re experiencing we’d certainly appreciate it. Thanks again.
So we’re now moving into the Q&A portion of our presentation and, again, you can submit any questions you have in the Q&A panel on your screen. I’ve got just a few here to get us started. The first one. What if the name and/or the Social Security number on the Income Withholding for Support which is Form FO195 do not match my employee?
John Contreras: So you received an Income Withholding Order, the social and the name on the order do not anybody that’s ever worked – that’s in your workforce. I would presume then that you would contact the managing county that issued it and work with the case manager there to determine if it was a mistaken identity or just done in error or some system issue.
Kira Lee Lakin: Great thanks. I’ve got another question. For independent contractors, when you say you paid over $600 that is for any calendar year, is that correct?
John Contreras: I believe so but I would have to do further research and get back to you on that.
Kira Lee Lakin: Okay. We’re certainly happy to follow up with that particular attendee. If an Income Withholding for Support is from another state, must the payment be sent to that state?
Corrinne Flores: Yes, it should be directed to the–on the IWO, there’s actually an address and it will tell you where to send the payment and it should be the other state’s State Disbursement Unit. Again, if it’s not directing you to send the payment to the State Disbursement Unit, then you could technically return that order to the sender and say this is not directing me to send those payments to the SDU so I need you to revise this and include the address in which to pay in the other state.
Kira Lee Lakin: Thanks, Cori. Our next question. In terms of notifying the employee, would it be in compliance for an employer to post the notice on an ESS portal for the employee or does it really need to be a hard copy of the PDF provided to the employee or the payroll processor?
John Contreras: Are you referencing the Income Withholding Order?
Kira Lee Lakin: I would think so, yes.
John Contreras: We would prefer that you provide them a hard copy because there is some documentation there that they would need to complete if they wanted to file an action in court to quash an Income Withholding Order.
Corrinne Flores: And as a side note, even if you’re an employer that received EIWOs, the requirement to notify your employee is still–needs to be complied with so you could do one of two things. The portal can send you a PDF of the actual order and so you would then print that out and provide that to your employee. Or what ADP did was we take the EIWO file format and we create our own PDF here and then that is mailed then to the employee.
Kira Lee Lakin: Great. I think we’ve got time for one more. So what is the timeframe prior to the lump sum payout that you need to notify the Child Support Office and how quickly do you get a response when you’re asking about a lump sum payment?
Corrinne Flores: So from a national level, it really depends on the state. Ohio has the most stringent timeframes and, again, on the Federal Office of Child Support’s portal, they have all the information–I should say, not the portal but the website–they have all the information and the state’s requirement in regards to timeframes. And from my understanding, and the states are usually very, very quick in returning the notification on what to withhold. And so I know that at a national level and I’ll let John speak to California.
John Contreras: Yes, we don’t have a specific requirement like X number of days tied to a payout. Typically what has happened, if we don’t get noticed through one of those emails or phone numbers that I referenced earlier for lump sum reporting, we typically just get a phone call from participating employers that there’s a lump sum bonus being paid out and we move quickly to get those things–Withholding Orders for lump sums out quickly. But give it as much leeway as possible.
Kira Lee Lakin: Great, thank you. So that actually is about all the time we have for Q&A but, if we didn’t get to your question, we will be following up with additional information wherever possible.
For more information from ADP, please feel free to give us a call at 855-237-6609. You can find more information about our wage garnishment services at www.adp.com/wagegarnishments. And also be sure to check out our blog at ADPComplianceInsights.com. And as always, we do appreciate your feedback. We very much appreciate any input you may have so please be in touch and let us know how we’re doing. And thank you for attending. That brings us to the end of our event today.
John Contreras: Yes, thank you very much.
Corrinne Flores: Thank you.