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What Every Employer Must Know About Child Support

Published: December 16, 2014
Information About:
Employers
Topics:
Employer Responsibilities, Bonus/Lump Sum Reporting, Electronic Payments/EFT/EDI, Income/Wage Withholding, National Medical Support Notice, New Hire Reporting, Verification of Employment
Types:
Outreach/Brochures

Topics


New Hire Reporting

  • Federal law requires employers to report information about newly hired and rehired employees to a designated state agency within 20 days of hire.  State law may require you to report sooner.
  • You must report the required seven elements (employee name, Social Security number, address, date of hire and the employer’s name, address, and Federal Employer Identification Number), and some states require additional information.
  • You must report employees you previously employed and who return after separating for at least 60 consecutive days.  In some states, the timeframe is shorter than 60 days.
  • Why is it important?
    • Information you provide is compared to child support records to locate parents to establish, modify, and enforce child support orders.
    • Reporting new hires reduces incorrect unemployment insurance and public assistance payments and saves millions of dollars.

Income Withholding and Medical Support

  • Income withholding is the most effective way to collect child support. 
  • When you receive an Income Withholding for Support (IWO) form from a child support agency, court, or other person, begin income withholding and continue until you receive official notification to stop.
    • If the order is not on the Office of Management and Budget-approved IWO form, you must return it to the sender and request the correct form. 
  • When you receive a National Medical Support Notice (NMSN), you must:
    • Determine whether any categories in the “Employer Response” section apply
    • Forward Part B to your Plan Administrator if the children are eligible for coverage
    • Notify the issuing agency if enrollment cannot be completed.

Employment Inquiries and Verifications

Payments

  • Federal law requires employers to remit payments to the State Disbursement Unit within seven business days of withholding from an employee.  State law may require you to remit sooner.
  • All states (except South Carolina) accept electronic payments, and some require employers to submit payments electronically
  • Bonus and lump sum payments are employee income, and you can garnish them to collect past-due child support.  Lump sum payments can include severance, leave payouts, insurance settlements, retirement incentives, commissions, stock options, lottery winnings, awards, and payments resulting from verdicts.  You may report bonus and lump sum payments online on the Employer Services Web Application through Lump Sum Reporting after you register.  You may also report bonus and lump sum payments through the federal Office of Child Support Enforcement’s electronic income withholding order (e-IWO) process if your company receives IWOs electronically. 
  • Some states require an employer to report a bonus or lump sum payment to the child support agency before paying it to the employee. 

Employee Terminations

  • You must notify the child support agency when your employee with an income withholding or medical support order leaves the job for any reason.
  • If you receive an IWO or NMSN for a person who has never worked for you, please inform the sender promptly. 
  • Electronic Termination (eTerm) is another service on the Employer Services Web Application that allows employers to report employee terminations or respond online to new IWOs for people who never worked for them.
  • If you want to register for the Employer Services Web Application, contact the Employer Services Team for a brief demonstration at employerserviceswebapp@acf.hhs.gov.
  • You may also report employee terminations through the federal Office of Child Support Enforcement’s electronic income withholding order process (e-IWO) if your company receives IWOs electronically. 

Thank you for all you do to make a difference in the lives of America’s children!

FOR MORE INFORMATION ABOUT EMPLOYERS AND CHILD SUPPORT:

See the Employers page on the OCSE Website

or

Email: employerservices@acf.hhs.gov.

OCSE Employer Information Line: 202-401-9267 (7:30 am—5:00 pm ET)