9.9 Wage Withholding

Policy

General Rules

Immediate Income Withholding

Under federal and Wyoming law, all new child support orders must provide that income withholding shall take effect immediately, unless:

1) The court finds good cause not to require immediate income withholding, and, the reasons for the exemptions are stated in the order; or

2) The parties agree, in writing, that immediate income withholding is not appropriate, the court approves the agreement, and the reasons for the exemptions are stated in the order.

If a child support order was entered prior to June 1, 1986 and does not require immediate income withholding, the District Court that entered the original order will enter an immediate income withholding order on its own motion or at the request of a parent or the Wyoming Child Support Program.

An immediate income withholding order will be used to collect current child support, cash medical support as described in 9.8 Medical Support, child and/or medical support arrears, and interest, penalties, and costs associated with a child support order.

Income Subject to Withholding

In Wyoming, income is defined by statute as “any form of payment or return in money or in kind to an individual, regardless of source. Income includes, but is not limited to wages, earnings, salary, commission, compensation as an independent contractor, temporary total disability, permanent partial disability and permanent total disability worker's compensation payments, unemployment compensation, disability, annuity and retirement benefits and any other payments made by any payor.” Wyo. Stat. § 20-6-202(a)(ix)

Withholding Limitations

The Wyoming Child Support Program follows the guidelines set forth in the Federal Consumer Credit Protection Act (CCPA) regarding wage withholding limitations. The wage withholding limitations are as follows:

15 USC § 1673 – FEDERAL RESTRICTIONS ON GARNISHMENTS

The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person will not exceed:

• 50% of disposable income when a non-custodial parent is supporting his spouse or dependent child (other than those who are the subject of the support order);

• 60% when a non-custodial parent is not supporting a spouse or other child; or

• Increases to 55% or 65% if the non-custodial parent is 12 weeks or more in arrears.

Income Withholding Payment Priorities

There may be instances when the amount requested on the Notice to Payor (NTP) exceeds the amount the employer can legally withhold as limited by the CCPA or similarly, the CCPA limits may be exceeded when an employer receives multiple wage withholding requests for the same non-custodial parent.

The following provides the rules for withholding prioritization and multiple wage withholdings.

Wage withholding will be disbursed in the following priority:

• Current support;

  • Child

  • Cash medical

  • Spouse

• Arrears;

  • Child

  • Medical

  • Spouse

• Health insurance; and

• Interest, penalties, costs and fees.

If there is more than one wage withholding order requiring payment to different custodial parents, then the payments withheld will be disbursed as follows:

• Each child shall receive an amount in the proportion which the child's current support bears relative to the total of all amounts for child support; and

• Any remaining withheld income shall be distributed to each child in the amount which the child's arrears bears relative to the total of all arrears.

Duties of the Employer

When an employer receives a NTP, the employer will:

• Begin withholding the non-custodial parent’s wages on the next pay period (an employer does not have to change its normal pay cycles);

• Remit the withholding to the State Disbursement Unit (SDU) within 7 days of the withholding;

• At the employer's option, withhold an additional $5.00 fee from each payment for expenses related to employer withholding;

• Notify the Clerk of District Court of a termination of employment within 30 days;

• Provide information regarding the non-custodial parent or new employer for one year from the date of termination; and

• Hold the NTP of the terminated employee until further notice.

Employer Enforcement

If an employer fails to withhold income as required by an NTP or withholds child support but fails to remit it to the Wyoming State Distribution Unit as required by an NTP, a District Court may hold the employer liable for the amount the employer should have withheld and remitted and/or a civil penalty not to exceed $200.00. Depending on the judicial district, a District Court may also hold an employer who fails to comply with an NTP in civil contempt of court.

If a payment from an employer has not been received within 45 days of the date the NTP was mailed, the caseworker will call the employer to discuss the NTP.

• If the employer acknowledges receipt of the NTP and states a payment will be forthcoming, the case worker will set an alert in POSSE for 15 days to check for a payment.

• If the employer denies it received the NTP, the case worker will, if possible, fax the NTP to the employer and set an alert for 15 days to check for a payment. If the NTP cannot be faxed to employer, the case worker will either mail or hand-deliver the NTP to the employer.

• When the case worker reviews POSSE for a payment after waiting 15 days and a payment has not been received, the case worker will discuss the case with the District Child Support Office Attorney for next steps.

Income Withholding

When a case worker identifies an employer for a non-custodial parent, within 2 days, the case worker will:

• Review the file for an immediate income withholding order;

• Generate the federally approved income withholding order/notice to payor (NTP);

• Mail a copy of the NTP to the employer, non-custodial parent, and custodial parent; and

• File the original with the Clerk of District Court.

• Effective July 1, 2014, the Income Withhold Order may be submitted to the employer electronically.

Under certain circumstances, POSSE will generate the NTP automatically. When this occurs, the State CSE Office will mail a copy of the NTP to the employer, non-custodial parent, custodial parent, District CSE Office, and Clerk of District Court.

Modify, Suspend, or Terminate Income Withholding

Modify

If the current support changes, the arrears are paid in full, or other circumstances exist as determined by the District Child Support Office Attorney, the case worker will amend the NTP by generating a copy of the federally approved income withholding order/notice to payor. The case worker shall mark the “Amended IWO” box at the top; mail a copy of the amended NTP to the employer, non-custodial parent, and custodial parent; and file the original with the Clerk of District Court.

Suspend

An NTP may be suspended if the custodial parent does not supply the Clerk of District Court with an address to remit payments or the parties to the case agree. If support is assigned, the Wyoming Child Support Program is a party and shall also agree to suspension of the NTP.

If suspension is required, the case worker will amend the NTP as described above and change the withholding amounts to $0.00.

Terminate

The case worker will terminate the NTP in the following circumstances:

• There is no longer a current support obligation and all arrears have been paid in full;

• The IV-D Child Support case is closed; or

• The obligor has two or more employers and withholding on all wages is not necessary; or

• The withholding was initiated incorrectly.

• The obligor's sole source of income is from Supplemental Social Security Income (SSI) payments, or concurrent SSI payments and Social Security Disability Insurance (SSDI) or a combination of SSI and Social Security (SSR) benefits.

In order to terminate the NTP, the case worker will generate the federally approved income withholding order/notice to payor (NTP) and mark the “Termination of IWO” box at the top; mail a copy of the NTP terminating withholding to the employer, non-custodial parent, and custodial parent; and file the original with the Clerk of District Court.

Special Circumstances

Intergovernmental Income Withholding

If a non-custodial parent’s employer is located in another state, the Uniform Intergovernmental Family Support Act (UIFSA) allows for direct withholding from the state which is enforcing the order to the state where the employer is located. In these instances, the case worker will follow the steps listed above in “Income Withholding”.

If the out-of-state employer fails to honor the Wyoming NTP, the case worker should immediately contact the employer to explain the withholding process. If the out-of-state employer continues to ignore the Wyoming NTP, the case worker will send a transmittal asking the other state to register and enforce the order as described in 11.2 Intergovernmental – Initiating.

Military Pay

If the non-custodial parent receives any form of military pay (active, reserve, National Guard, or retired) or works for the Department of Defense, the case worker will complete the “Income Withholding” steps listed above and send the NTP to the appropriate address as discussed in Chapter 15 Military.

Unemployment Insurance Benefit (UIB)

The Wyoming Child Support Program exchanges case information with the Wyoming Department of Employment, Unemployment Insurance Division to withhold child and medical support from any non-custodial parent with a IV-D child support case receiving UIB.

Worker’s Compensation

Based upon a data exchange between the Wyoming Child Support Program’s computer system, POSSE, and the Worker’s Safety and Compensation Division, the case worker receives information when a non-custodial parent is receiving or has applied for worker’s compensation benefits. If a wage withholding is appropriate, the case worker will take steps to withhold the non-custodial parent’s worker’s compensation benefits as described above in “Income Withholding.”

Social Security Benefits

Information about a non-custodial parent’s receipt of social security benefits may be obtained through the State Verification and Exchange System (SVES) as described in 7.4 Locate – FCR.

The Social Security Retirement (SSR) benefits and Social Security Disability Insurance (SSDI) benefits are subject to income withholding for child support. Supplemental Security Disability Insurance (SSDI) benefits are subject to income withholding for child support as long as the obligor is not also receiving Supplemental Security Income, which is need-based and exempt from withholding.

If a case worker determines a non-custodial parent is receiving SSR or SSDI, the case worker will take steps to withhold from benefits as described above in “Income Withholding.” The case worker will send the NTP to the local SSA office. The SSA office will enter the data on the SSA’s Court Order Garnishment System (COGS).

If a disability claim by a non-custodial parent is pending and the NTP is received, COGS will hold the NTP in its system until the claim is resolved. If the NTP is more than a year old, SSA will contact the case worker to ensure income withholding is still appropriate.

If a non-custodial parent receives a lump sum from SSA, COGS will withhold up to CCPA limits if the NTP provides specific instructions on how to handle a lump sum payment. If the NTP does not provide specific instructions, SSA will contact the case worker for instructions.

Veteran’s Benefits

Veteran’s benefits are exempt from child support withholding unless the benefit is compensation for employment. In that case, the case worker will follow the steps indicated above in the “Income Withholding” section. The NTP should be sent to the Regional Veterans Administration (VA) Office.

According to the Social Security Act and other federal statutes governing VA benefits, there are certain limited circumstances when dependents may obtain financial support from a veteran’s benefits. Those circumstances include:

1) If a veteran is entitled to receive military retired pay and waives a portion to receive VA disability pay, then the VA disability pay in lieu of retired military pay may be garnished to satisfy a child support order; however this provision does not apply if the child is no longer a minor.

2) If the veteran is not residing with his or her child(ren) and not providing support, then the veteran’s compensation, pension, or emergency officer’s retirement pay may be apportioned for the benefit of the child(ren).

3) A special apportionment may be authorized if the custodial parent shows a hardship for the child(ren).

If the case worker believes the case meets one of the exceptions, the case worker should send a letter on state letterhead to the VA and request an apportionment review.

Cross Reference

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