Topic:
EMPLOYEES (GENERAL); CHILD SUPPORT; LEGISLATION; EMPLOYMENT (GENERAL);
Location:
EMPLOYMENT;
Scope:
Connecticut laws/regulations;

OLR Research Report


September 29, 2000

 

2000-R-0931

EMPLOYER CHARGES FOR WAGE WITHHOLDING ORDER COMPLIANCE

By: Susan Price-Livingston, Associate Analyst

You asked whether employers can charge a fee for withholding wages from the paychecks of employees who owe child support.

SUMMARY

State law prohibits Connecticut employers from charging a fee for complying with wage withholding orders. Federal child support law permits states to set employer fees, and 46 states and the District of Columbia have done so.

CONNECTICUT LAW

Under Connecticut law, employers are not permitted to charge extra fees for administering wage attachment orders. Connecticut law bars an employer from withholding or diverting any part of an employee's wages unless (1) state or federal law allows it, (2) he has the employee's written authorization, or (3) the employee authorizes deductions in writing for medical benefits and the employer does not derive any financial benefit from the deduction (CGS 31-71e). A bill was proposed in the 1997 General Assembly session to allow Connecticut employers to charge for administering wage withholdings. The Labor and Public Employees Committee held a public hearing but took no action on the proposal (SB 377, copy attached).

FEDERAL LAW

The federal child support enforcement (commonly referred to as “IV-D”) program requires employers to comply with wage withholding orders by deducting support payments from their employees' paychecks. It permits employers to withhold and keep an additional amount as a processing fee if their state sets the rate (42 USC 666(b)(6)). Employers may waive the fee or charge employees less than the full amount.

STATE FEE REGULATION

Employer fees for child support withholding are not permitted in Connecticut, Michigan, New York, or South Dakota. Employers in 27 states can charge a flat rate, ranging from $1 to $5, for each withholding transaction. Twelve states set a monthly cap on employer charges. Three permit larger “set-up” fees for the first withholding transaction, and one permits a one-time $25 employer charge. Three others allow employers to charge a percentage of the withheld amount. Finally, Wisconsin permits employers to pass on the “actual cost” of withholding, up to $3. (Susan Pfeiffer, Wisconsin's director of child support enforcement, reports that the state does not monitor how employers calculate their actual cost, and that most simply charge $3 per withholding.)

Table 1 summarizes all states' and the District of Columbia's fees.

Table 1: Wage Withholding Fee 1

STATE

MAXIMUM EMPLOYER FEE

Alabama

$2 per month

Alaska

$5 per withholding

Arizona

$2.25 per month

Arkansas

$2.50 per withholding

California

$1 per withholding

Colorado

$5 per month

Connecticut

No fee permitted

Delaware

$2 per withholding

District of Columbia

$2 per withholding

Florida

$5 set-up fee, $2 for each subsequent withholding

Georgia

$25 set-up fee, $3 for each subsequent withholding

Hawaii

$2 per withholding

Idaho

$5 per withholding

Illinois

$5 per month

Indiana

$2 per withholding

Iowa

$2 per withholding

Kansas

The lesser of $5 per pay period or $10 per month

Kentucky

$1 per withholding

Louisiana

$5 per withholding

Maine

$2 per withholding

Maryland

$2 per withholding

Massachusetts

$1 per withholding

Michigan

No fee permitted

Minnesota

$1 per withholding

Mississippi

$2 per withholding

Missouri

$6 per month

Montana

$5 per month

Nebraska

$2.50 per month

Nevada

$3 per withholding

New Hampshire

$1 per withholding

New Jersey

$1 per withholding

New Mexico

$1 per withholding

New York

No fee permitted

North Carolina

$2 per withholding

North Dakota

$3 per month

Ohio

The greater of $2 or 1% of the amount withheld

Oklahoma

The lesser of $5 per pay period or $10 per month

Oregon

$5 per levy

Pennsylvania

2% of support obligation

Rhode Island

$2 per withholding

South Carolina

$3 per withholding

South Dakota

No fee permitted

Tennessee

The lesser of 5% of support obligation or $5 per month

Texas

$5 per month

Utah

$25 one-time fee

Vermont

$5 per month

Virginia

$5 per withholding

Washington

$10 set-up fee, $1 for each subsequent withholding

West Virginia

$1 per withholding

Wisconsin

Actual cost of withholding, up to $3 per transaction

Wyoming

$5 per withholding

1 Source: U.S. Department of Health and Human Services, Office of Child Support Enforcement, State Profile System (updated 9/8/00).

SP-L:ts