OCSE Updates Child Support Withholding Information for Employers

Author: Rena Pirsos, XpertHR Legal Editor

March 18, 2015

To help employers comply with employees' child support withholding orders, the federal Office of Child Support Enforcement (OCSE) has issued updated information regarding the process of lump-sum payment reporting and the states that now use the electronic income withholding order (e-IWO). The OCSE has also released a report on its 2014 Employer Symposium.

Lump-Sum Payment Reporting Process

Some state child support agencies require employers to report lump-sum payments made to employees who are subject to a child support enforcement order before actually making the payment. This allows the agencies to then inform employers of the portion of such payments subject to withholding for child support. Lump-sum payments are defined under state law, but generally include any payment of income that is not made at a regular or periodic interval, such as bonuses, commissions, severance pay, vacation pay and various incentive payments.

OCSE encourages employers to use its online Child Support Portal to report in advance any upcoming employee lump-sum payments to state child support agencies by either:

  • Entering information about each employee into the fields on the Lump Sum Reporting screen; or
  • Uploading a Microsoft Excel spreadsheet (or similar format) to report at one time a batch of employees who will have a lump-sum payment.

After providing pending lump-sum payment information, employers will:

  • Receive confirmation that the information was uploaded;
  • Be able to review errors if the information was not uploaded;
  • Correct the errors and resubmit files; and
  • View information reported in the last 60 calendar days.

The OCSE Portal will:

  • Validate file uploads:
  • Notify an employer if there are file errors;
  • Re-validate a file after an employer re-submits it;
  • Compare information provided by an employer to its information on file about the employee(s) who owe child support;
  • Notify the state(s) about the pending lump-sum payment(s); and
  • Provide details about information submitted by employers for 60 calendar days.

The states are then required to notify an employer if the actual lump-sum payment(s) should be attached. OCSE has updated its list of states that accept online lump-sum reporting.

An employer interested in registering to report lump-sum payments online should contact the Employer Services Team for a brief demonstration before it attempts to register.

E-IWO States

OCSE reports that 34 states have begun using the e-IWO, the automated income withholding order transmittal system, under the requirement that all states adopt its use by December 31, 2015. Seven additional states are currently developing the ability to use the e-IWO (Georgia, Louisiana, Montana, New Hampshire, Rhode Island, Utah and Wyoming); only four states have not yet begun to develop e-IWO capability (Alaska, Mississippi, South Carolina and Vermont).

Employer Symposium Report

The OCSE's 2014 Employer Symposium served as a gathering of experts from the child support and employer communities to collaborate on improving communication and cooperation between the child support program and employers and to hear their recommendations. State representatives were given the opportunity to explain the reasons for certain existing employer-related processes, and employers had the chance to voice their concerns about the burdensome aspects of those processes. OCSE reports that some of the recommended changes would require legislative action in order to mutually satisfy the concerns of states and employers.

Topics discussed included new hire reporting, employment verifications, medical support, income withholding orders (IWOs), electronic income withholding orders (e-IWOs), the Debt Inquiry Service (DIS), electronic terminations (eTerm) and a proposed employer portal (eConnect).

OCSE reports that it will analyze the recommended changes and work with organizations (such as the American Payroll Association, the Eastern Regional Child Support Association, the Western Interstate Child Support Enforcement Council, the National Child Support Enforcement Association, the National Council of Child Support Directors and the Employer Services Workgroup) to identify which recommendations to pursue.