Wage Garnishment

• In the United States, when an individual owes money such as child support or taxes, her wages can be garnished in order to fulfill that obligation. For instance, through a court order, the employer can be required to withhold money from an employee's compensation (salary earnings or hourly wages). The withheld money is then used to fulfill the employee's financial obligation such as child support or tax debt. U.S. federal law limits garnishment to no more than 25 percent of disposable income, but some states observe thresholds with a lower percent limit. Presently, all states and territories allow wage garnishment for child support.
  
  

New Hire Reporting

• The New Hire Reporting Program requires employers to provide identifying information of newly hired employees to designated state child support agencies within 20 days of hire. These agencies match the information provided by the employer against state and national child support records in order to determine whether or not the employee owes child support. If the employee does owe child support, the agency can then issue an income-withholding order to the employer. At that point, the employer will be required by law to deduct earnings from the employee's compensation in order to fulfill the employee's financial obligation.
  
  Upon hiring a new employee, employers must provide the following information in their report to the designated state child support agency: the employer's name, address and FEIN (federal employer identification number) and the employee's name, address and SSN (social security number).
  
  

Income Withholding

• Income withholding orders are orders by the court or through government administrative agencies that lawfully require employers to deduct specified amounts of money from an employee's earnings to cover child support arrears and/or obligations. All employers must comply with these orders, even if the order comes from an out-of-state court or out-of-state administrative agency. Additionally, child support garnishments must be paid before all other garnishments, such as credit card or default student loans, except for outstanding federal tax (IRS) garnishments that were levied prior to the child support order.
  
  

Medical Support

• In addition to paying child support, many noncustodial parents are also obligated to provide medical coverage or to pay medical expenses as part of their support obligations. The National Medical Support Notice, which is sent to all employers from designated state child support agencies, advises employers to withhold any employee contributions that are due under group health plans if the employee is required by court order to provide medical coverage for his children. If the employer does not provide coverage or, alternatively, if the employee is not eligible for it, the employer must provide an Employer Response stating such to the designated state child support agency.
  
  

Payments

• The employer must send all withheld funds to the state disbursement unit within 1 to 7 days after payday. Payments can be remitted by mail or sent electronically. All state child support agencies, with the exception of South Carolina, offer payment by electronic funds transfer (EFT) or electronic data interchange (EDI).