Employers play an important role when it comes to child support. The Arkansas Office of Child Support Enforcement (OCSE) Clearinghouse, often referred to as the State Disbursement Unit (SDU), relies on partnerships with employers in order to provide assistance to ensuring child support payments are paid. In addition to child support, the OCSE helps families establish paternity and medical support orders.
Under Arkansas law, the Arkansas Department of Finance and Administration gives employers three primary responsibilities regarding collections of child support from their employees:
- Report all newly hired or re-hired employees
- Withholding specified, court-ordered amounts of child support from employees’ wages. The withholdings must be submitted to the SDU in a timely manner.
- If applicable, enroll an employee’s children in the company health insurance plan.
New Hire Reporting
Federal and Arkansas law (Arkansas Code Ann. 11-10-901 and 902) requires employers to report new hire information to the Arkansas Employment Security Department. This information helps state agencies locate noncustodial parents who owe child support in Arkansas. Additionally, the information is used to aid in discovering unemployment insurance fraud, worker’s compensation fraud and other types of public assistance fraud. The New Hire Reporting program is confidential and secure.
All Arkansas employers (including private, nonprofit and government agencies) must report all employees who live or work in Arkansas. Out of state employers who hire employees who work in Arkansas must also report. Multi-state employers must report newly hired employees to the state in which they are working or they are allowed to select one state to report. There is no exception to the type of employee. Any employee who fills out a W-4 form whether full-time, part-time, re-hires or re-called employees, temporary or student worker must be reported within 20 days of the hire date.
Without the employers’ cooperation, the SDU’s job would be much more difficult to locate noncustodial parents owing child support.
The employer must report the following information:
- Employee’s name
- Employee’s address
- Employee’s Social Security Number
- Employer’s Name
- Employer’s Address
- Employer’s Federal Employer Identification Number
This information may be electronically reported or mailed to:
The Arkansas New Hire Reporting Center
P.O. Box 2540
Little Rock, AR 72203
No other child support method is as successful as income withholding. Therefore, unless the court approves an alternative arrangement, Arkansas law requires that child support must be paid by income withholding if the noncustodial parent is employed. The Income Withholding Order (IWO) for child support takes priority over all other legal processes (with the exception of a federal (IRS) tax levy entered prior to the child support order) under Arkansas law.
Once employers receive the IWO, they are required to withhold the specified amount until further notice. If employers choose, they may retain a maximum of $2.50 administrative fee from the employee’s salary. Employers are required to begin withholding no later than the first pay periods that occurs after 14 days following the date the notice was mailed. If employers do not comply, they may be held liable for the amount up to the amount that should have been withheld.
The amount of income that is subject to withholding for child support is limited. The maximum amounts are based on the Credit Consumer Protection Act. The percentage withheld is dependent upon various reasons like whether or not the obligated parent is remarried and supporting a new family. The Wage Withholding Worksheet will aid employers and employees in determining the percentage withheld.
Employers cannot discipline, discharge or refuse to hire someone because of income withholding for child support payments or medical insurance premiums. If evidence proves an employer did any of these things they may be subject to contempt of course and result in a fine of $50 per day.
Company Health Insurance Enrollment
If a company offers health insurance to its employees, a National Medical Support Notice (NMSN) may be sent directing an employer to withhold an amount of money sufficient to cover the premiums. The notice must be forwarded to the health plan administrator within 20 business days. The children must be enrolled upon receipt of the notice.
Once the child(ren) is/are enrolled, he or she may not be removed from enrollment while the employee is eligible for coverages unless a court orders otherwise.
The NMSN takes priority over all other legal processes except an IWO.
The SDU and employer partnership helps in many ways:
- Promote a stable and reliable workforce.
- Save taxpayers’ millions of dollars because families that receive regular child support are less likely to require public assistance.
- Decrease the likelihood of fraud.
- Promote the health of children.
- Encourages a future skilled workforce.
If you need assistance getting child support or are an employee who has been wrongfully terminated due to a child support requirement contact Kevin Hickey Law Partners today.