wa-law.org > bill > 2023-24 > HB 1262 > Original Bill
The legislature recognizes the importance of child support for families and the crucial role employers play as the primary source of income for many parents who owe child support.
The legislature finds that when states have adopted a program for withholding and collection of lump sum payments from employers for child support arrears, those states have seen an increase in funds going to children. Employers, however, face a risk of liability for failing to timely pay employees their earned income by holding a lump sum payment pending a state response on whether arrears for child support are owed and withholding is required. Employers also face a risk of liability if a lump sum payment is released to an employee before receiving a state response about arrears for child support and withholding, even if the employer is complying with state wage and hour laws.
As a result, the legislature finds that adopting a program for withholding and collection of lump sum payments from employers for child support arrears that states the requirements of the department of social and health services and employers benefits families by increasing funds going to children and also mitigates risks to employers.
The definitions contained in RCW 74.20A.020 shall be incorporated into and made a part of this chapter.
"Support order" means a superior court order or administrative order, as defined in RCW 74.20A.020.
"Earnings" means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and, notwithstanding any other provision of law making the payments exempt from garnishment, attachment, or other process to satisfy support obligations, specifically includes periodic payments pursuant to pension or retirement programs, or insurance policies of any type, but does not include payments made under Title 50 RCW, except as provided in RCW 50.40.020 and 50.40.050, or Title 74 RCW. Earnings shall specifically include all gain from capital, from labor, or from both combined, not including profit gained through sale or conversion of capital assets.
"Disposable earnings" means that part of the earnings of an individual remaining after the deduction from those earnings of an amount required by law to be withheld.
"Employer" means any person or entity who pays or owes earnings in employment as defined in Title 50 RCW to the responsible parent including but not limited to the United States government, or any state or local unit of government.
"Employee" means a person in employment as defined in Title 50 RCW to whom an employer is paying, owes or anticipates paying earnings as a result of services performed.
"Lump sum payment" means income other than a periodic recurring payment of earnings on regular paydays and does not include reimbursement for expenses. Lump sum payment includes, but is not limited to, discretionary and nondiscretionary bonuses, commissions, performance bonuses, merit increases, safety awards, signing bonuses, moving and relocation incentive payments, holiday pay, termination pay, and severance pay. Lump sum payment also includes workers' compensation, insurance settlements, and personal injury settlements paid as replacement for wages owed.
The division of child support may issue an income withholding order:
As authorized by a support order that contains a notice clearly stating that child support may be collected by withholding from earnings, wages, or benefits without further notice to the obligated parent; or
After service of a notice containing an income-withholding provision under this chapter or chapter 74.20A RCW.
The division of child support shall serve an income withholding order upon a responsible parent's employer or upon the employment security department for the state in possession of or owing any benefits from the unemployment compensation fund to the responsible parent pursuant to Title 50 RCW or from the paid family and medical leave program under Title 50A RCW:
In the manner prescribed for the service of a summons in a civil action;
By certified mail, return receipt requested;
By electronic means if there is an agreement between the secretary and the person, firm, corporation, association, political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States to accept service by electronic means; or
By regular mail to a responsible parent's employer unless the division of child support reasonably believes that service of process in the manner prescribed in (a) or (b) of this subsection is required for initiating an action to ensure employer compliance with the withholding requirement.
Service of an income withholding order upon an employer or employment security department requires the employer or employment security department to immediately make a mandatory payroll deduction from the responsible parent's unpaid disposable earnings or benefits paid by the employment security department. The amount to be withheld stated in the income withholding order is as follows:
If the income withholding order is not for a lump sum payment under section 5 of this act, the employer or employment security department shall thereafter deduct each pay period the amount stated in the order divided by the number of pay periods per month. The payroll deduction each pay period shall not exceed 50 percent of the responsible parent's disposable earnings; or
If the income withholding order is for a lump sum payment under section 5 of this act, the employer shall withhold the lump sum payment or the amount stated in the order, whichever is less, unless a portion of the lump sum payment is disposable earnings. If a portion of the lump sum payment is comprised of disposable earnings, 50 percent of the portion considered disposable earnings is not subject to the income withholding order.
An income withholding order for support shall have priority over any wage assignment, garnishment, attachment, or other legal process.
The income withholding order shall be in writing and include:
The name and social security number of the responsible parent;
The amount to be deducted from the responsible parent's disposable earnings each month, or alternate amounts and frequencies as may be necessary to facilitate processing of the payroll deduction;
A statement that the total amount withheld shall not exceed 50 percent of the responsible parent's disposable earnings;
The address to which the payments are to be mailed or delivered; and
A notice to the responsible parent warning the responsible parent that, despite the payroll deduction, the responsible parent's privileges to obtain and maintain a license, as defined in RCW 74.20A.320, may not be renewed, or may be suspended if the parent is not in compliance with a support order as defined in RCW 74.20A.320.
An informational copy of the income withholding order shall be mailed to the last known address of the responsible parent by regular mail.
An employer or employment security department that receives an income withholding order shall make immediate deductions from the responsible parent's unpaid disposable earnings and remit proper amounts to the Washington state support registry within seven working days of the date the earnings are payable to the responsible parent.
An employer, or the employment security department, upon whom an income withholding order is served, shall make an answer to the division of child support within 20 days after the date of service. The answer shall confirm compliance and institution of the payroll deduction or explain the circumstances if no payroll deduction is in effect. The answer shall also state whether the responsible parent is employed by or receives earnings from the employer or receives benefit payments from the employment security department, whether the employer or employment security department anticipates paying earnings or benefits and the amount of earnings or benefit payments. If the responsible parent is no longer employed, or receiving earnings from the employer, the answer shall state the present employer's name and address, if known. If the responsible parent is no longer receiving benefit payments from the employment security department, the answer shall state the present employer's name and address, if known.
The returned answer or a payment remitted to the division of child support by the employer constitutes proof of service of the income withholding order in the case where the order was served by regular mail.
The employer may deduct a processing fee from the remainder of the responsible parent's earnings after withholding under the income withholding order, even if the remainder is exempt under RCW 26.18.090. The processing fee may not exceed: (a) Ten dollars for the first disbursement made to the Washington state support registry; and (b) one dollar for each subsequent disbursement to the registry.
The income withholding order shall remain in effect until released by the division of child support, the court enters an order terminating the income withholding order and approving an alternate arrangement under RCW 26.23.050, or until the employer no longer employs the responsible parent and is no longer in possession of or owing any earnings to the responsible parent. The employer shall promptly notify the office of support enforcement when the employer no longer employs the parent subject to the income withholding order. For the employment security department, the income withholding order shall remain in effect until released by the division of child support or until the court enters an order terminating the income withholding order.
The division of child support must use income withholding forms adopted and required by the United States department of health and human services to take withholding actions under this section whether the responsible parent is receiving earnings or unemployment compensation in this state or in another state.
The employer or the employment security department may combine amounts withheld from the earnings of more than one responsible parent in a single payment to the Washington state support registry, listing separately the amount of the payment which is attributable to each individual.
No employer nor employment security department that complies with an income withholding order under this chapter shall be civilly liable to the responsible parent for complying with an income withholding order under this chapter.
No employer shall be civilly liable to the responsible parent for:
Reporting a lump sum payment under this chapter; or
Withholding and remitting a lump sum payment under this chapter or under chapter 74.20A RCW.
No insurance company shall be civilly liable to the responsible parent for complying with:
An order to withhold and deliver issued under RCW 74.20A.080 or with any other withholding order issued under this chapter;
A lien filed by the department under chapter 74.20A RCW; or
A combined lien and withholding order developed by the department to implement chapter 168, Laws of 2021.
An insurance company complying with a withholding order issued by the department or with a lien filed by the department may not be considered to be committing a violation of the insurance fair conduct act under chapter 48.30 RCW.
An employer who has been served with an income withholding order for a responsible parent under this chapter, or chapter 74.20A or 26.21A RCW, that includes a provision for payment toward child support arrears shall notify the division of child support before making any lump sum payment of more than $500 to the responsible parent. An employer may report a lump sum payment of a smaller amount or an amount yet to be determined by the division of child support.
The employer provides notice by contacting:
The division of child support; or
The federal office of child support enforcement.
An employer who reports a lump sum payment under this section shall determine the portion of the lump sum payment which consists of disposable earnings and may disburse 50 percent of that amount to the responsible parent.
The employer must withhold and remit to the division of child support the amount needed to comply with the income withholding order.
Notwithstanding any other provision of state law, unless otherwise agreed to by the employer and the division of child support, the employer may not disburse the remaining amount of the lump sum payment before the earlier of:
The 15th calendar day after the date on which the employer reports the lump sum payment; or
The date on which the income payer receives authorization from the division of child support to make all or a portion of the lump sum payment.
Upon receipt of notice of a lump sum payment under this section, the division of child support shall respond to the employer within 14 calendar days after receiving the employer's report of a lump sum payment by providing:
A written release indicating that some or all of the portion of the lump sum payment retained by the income payer may be disbursed to the obligor; or
An amended or supplemental income withholding order or other written demand specifying the amount of the lump sum payment to be remitted to the division of child support on behalf of the responsible parent.
The duties of an employer under this section are governed by the laws of the state of the responsible parent's principal place of employment.
Failure to timely provide notice of a lump sum payment may constitute noncompliance under RCW 74.20A.350.