State Agencies, Employers Work to Standardize Child Support Laws

Employers play an integral role in helping state child support agencies improve their policies and laws, state child support officials said March 21.

It is important that employers and state child support agencies share recommendations with one another, said James Fleming, director of North Dakota’s child support division. Improving and standardizing state child support laws requires communication between state agencies and employers, he added.

Fleming was speaking at the American Payroll Association’s Capital Summit, along with Konitra Jack, director of Louisiana’s child support enforcement division. Together, the two are members of the National Council of Child Support Directors and cochair its Employer Collaboration Committee. The APA frequently works with the NCCSD to improve state child support policies and procedures on behalf of payroll professionals, who are responsible for collecting the majority of child support in the US.

Although the federal government has its own child support laws, all 54 states and territories each have their own laws that differ from one another.

“By and large, child support law varies for each state,” Fleming said. “So, we are not in any way a national or federal program, but we are 54 interconnected stakeholders.”

Some of the committee’s recent work centers on creating uniform forms that all states and territories can adopt, as well as drafting model legislation that would simplify child support procedures for employers, especially multistate ones.

Standardized Forms

Standardizing child support forms across the country makes it easier for employers to properly withhold income, Fleming said.

Although income withholding orders and notices are the same form, orders are sent to employers from a government agency, while notices are sent by any other entities, such as a court or an attorney, he said. Income withholding orders and notices are an example of a standardized child support form that is used across the US.

“While the format and the fonts might change, the order or notice itself is easily recognizable as the standard income withholding order,” Fleming said. “A proper notice or order is going to require payment to a state disbursement unit or a tribal payee. If the form says to pay to a law firm or somebody else’s address, it is a nonconforming order and you should reject it.”

The standardized form is also simpler than previous iterations and does not require employers to do extensive mathematical calculations to determine how much to withhold from wages, he added.

Another form that has been standardized to ease an employer’s child support obligations is the Standard Response to Verification of Employment form, said Jack. The form does not include all the information a state child support agency might need, but it is the only form that every state and territory has adopted without a federal mandate.

Ideally, “the form may need to be longer because it does not include everything,” Jack said. “But by streamlining this form, it makes it easier, more predictable, and more accessible for state child support agencies to get at least some of the information required.”

The standardized VOE form is also easy for employers to fill out, Fleming added. Only the first two pages of the eight-page form need to be completed if an employer does not provide fringe benefits.

Model Legislation

The NCCSD is working on preparing model legislation for states to adopt regarding employer reporting for lump sum payments and independent contractors, Fleming said.

Model legislation for reporting lump sum payments is nearly complete and would establish a consistent lump-sum reporting threshold, he said.

“States want employers to report lump sum payments because they are supplemental to any ongoing monthly payment,” he said. “But when you look across the states, only about two dozen have a lump-sum reporting requirement. And when you look at the requirements, you see that the timing is different, the amounts are different, and the process is different.”

Fleming acknowledged that, often, payroll departments might know that a bonus is about to be paid out without knowing the amounts, which can complicate the reporting obligation before the payout date. The model legislation would alleviate that burden by allowing employers to report the simple fact that lump sums will be paid out on a certain date. State agencies could then notify employers of the percentage of the payment that is to be withheld for child support, regardless of the amount.

The NCCSD is also working on model legislation for reporting independent contractors, but state child support agencies need to collaborate with state revenue departments as they draft it, Jack said. Payroll professionals will also need to work with their accounts payable teams, since accounts payable is typically responsible for paying independent contractors.

Model legislation requiring independent contractor reporting is important to child support enforcement because many individuals are working as independent contractors, not employees, Fleming added.

Success of the model legislation will partially depend on support from the payroll community, he said.

“We know that child support is not part of an employer’s trade or business,” he said. “But we couldn’t do what we do without you.”