Employer Reporting Programs of Washington, Alaska and Minnesota
July 6, 1992
TO:ALL STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS
SUBJECT: Employer Reporting Programs of Washington, Alaska and Minnesota
BACKGROUND:State and local child support agencies have long been aware that the ultimate success of child support establishment and enforcement actions depends on the accuracy of information regarding the obligor's current employment. A significant number of obligors who are delinquent in their child support obligations change jobs frequently or work in seasonal or cyclical industries. Enforcing child support orders through wage withholding or other means against these obligors is difficult, as employment often terminates before the notice to withhold income reaches the employer. In these cases, information obtained from quarterly SESA cross-matches or other sources is outdated and puts the IV-D agency several paces behind the obligor. Reducing the gap between hiring and withholding for child support can improve the IV-D agency's effectiveness and responsiveness and reduce the frustration experienced in dealing with high turnover and job-hopping.
The States of Washington and Alaska have each designed, and are currently testing, programs to address this problem. Minnesota has been operating an employer disclosure program since 1987.
The Washington State Employer Reporting Program (ERP), created under State law, began July 1, 1990 under the administration of the Washington Department of Social Services, Office of Support Enforcement (OSE, Washington's IV-D agency). Under the ERP law, specific industries must report all new hires and rehires to the State child support agency within 30 days of hiring. The targeted industries are those which typically employ individuals on a seasonal or cyclical basis, hire and lay off as needed for projects, or have rapid turnover. Under Washington's law, the industries required to report new hires and rehires were: building construction, other construction (e.g., highways, bridges, tunnels, sewers and power lines), manufacturing of transportationequipment, business services and health services.
Several alternative methods for reporting are available to these industries for reporting, including submitting W-4 forms, employer designed forms or OSE designed forms, or using a toll-free telephone number. Employers are encouraged to use the method that is most cost effective for their business. Reports are processed by OSE within three days of receipt. Reported data are matched to OSE's automated data system by date of birth, parent name and Social Security number and are then destroyed to protect the privacy of employees who did not owe support obligations.
A Support Enforcement Officer (SEO) is automatically notified of a match in the SEO's caseload by a computer-generated "match code" which flashed on screen when the SEO's computer was turned on. The SEO then initiates immediate collection actions (e.g., payroll deduction notices, liens) or other actions (e.g., medical insurance enrollments, paternity orders).
As a result, during the first 18 month period (July 1990 to January 1992), over 12,000 employers submitted over 216,000 reports of new hires and rehires. Of these reports, 8% matched with open cases of obligors. Of these matched cases, 87% of the obligors had made no support payments during the preceding year. Based on employer reports, collections were successful among 43% of those who were non-payers the previous year, averaging $1,200 per parent over 18 months. The Washington CSE considers the program to be cost effective for the State (for every dollar spent on the program, $22 were collected). A separate report to the Washington legislature on the cost to business of reporting all new hires is expected this fall.
In 1991 OCSE funded a Program Improvement demonstration grant to the State of Alaska to set up a system whereby targeted employers, selected during the initial phase by size (the 30 largest in the State), are required to report new hires and rehires within 30 days after employment. The State is testing the hypothesis that the timeliness of the data will lead to faster and more profitable wage withholding. A second phase will initiate the system for seasonal employers, and a third phase will select employers by industry code. A final report on this project is due in October 1994.
Minnesota's Employer Disclosure Program was created underState law in 1987. When any individual in the State is hired, the employer must request that the individual disclose whether or not he/she has a child support obligation which is required by law to be withheld from income. When an employee answers in the affirmative, the employer must begin withholding in accordance with the terms of the order. Minnesota recognized early on that employer education would be crucial to the success of the project and designed a comprehensive program involving direct training, informational brochures and public service announcements to accomplish this task. The State believes that this program, in reducing the child support worker's time spent on locating new employers, has allowed the IV-D agency to concentrate its resources on more productive activities.
SUMMARY:The Washington project initial results are encouraging, and illustrate the benefits of a reporting approach targeted to certain industries. The U.S. Commission on Interstate Child Support has recommended that a system of reporting of new employees be developed by requiring employers to provide a copy of every new employee's W-4 form (revised to include information on child support obligations) to a State agency. The National Governors Association has also called for further study and demonstrations of W-4 reporting prior to any nationwide effort.
ATTACHMENTS:Attached are a copy of the Executive Summary and Highlights of Washington's ERP Longitudinal Report (July 1990 - January 1992) as well as copies of the Washington, Alaska and Minnesota statutes on employer reporting.
INQUIRIES:ACF Regional Administrators
Allie Page Matthews
Office of Child Support Enforcement