Involuntary and Voluntary Pay Deductions: California
Federal law and guidance on this subject should be reviewed together with this section.
Author: Vicki M. Lambert, The Payroll Advisor
- An employer must begin withholding for child support within 10 days after receipt of an Income Withholding Order (IWO). Payments must be remitted within seven business days after the withholding occurs. Child support cannot exceed a certain percentage of disposable earnings. Special rules apply to interstate income withholding orders for child support. Employers that are required to file state taxes electronically are also required to remit child support payments electronically. See Child Support Withholding.
- California limits the amount of disposable income that is subject to creditor garnishment. See Creditor Garnishment Withholding.
- No assignment of wages is valid in California unless certain conditions are met. In addition, only a certain percentage of an employee's disposable wages can be withheld from each paycheck. Unlike a garnishment order, which is required to be honored by law, an employer has no obligation to honor an assignment. See Voluntary Wage Assignments.
- If an employee has unpaid state taxes or another state liability, the California Franchise Tax Board (FTB) has the right to issue an Earnings Withholding Order for Taxes (EWOT) as a wage garnishment to collect the liability. EWOTs continuously seize a percentage of the employee's earnings until the order is released by the FTB. To fully comply with an EWOT, employers must take certain steps. The FTB has the right to hold the employer responsible for the tax debt if it does not comply with all requirements. See Tax Levies.
- In order to collect delinquent vehicle registration fees from individuals, the California Franchise Tax Board (FTB) has the right to issue Earnings Withholding Orders (EWOs) as wage garnishments against employees. Employers must take certain steps in order to comply with an EWO. The limits on the amount of disposable earnings that are subject to an EWO are based on the federal garnishment limits. See Vehicle Registration Withholding Orders.