Child support and subcontractors

Leslie

I have an ee whose husband is a stucco contractor. He subcontracts out a lot of the labor. Yesterday he received notice to pay child support on one of the subs that he writes checks to. They give this guy a 1099 at the beginning of the year, and while they usually do write him a check once a month it's in payment for jobs completed, not hours worked.

I'm of the opinion that they don't have to pay attention to the child support order. Any other opinions out there?

Crout

If I understand you, the EE's husband received a garnishment order for one of his independent contractors....is that correct? If so, the answer is that the order does not apply to an independent contractor, however, the order should not be ignored. The EE's husband should draft a letter to the court and explain the situation fully.

Leslie

Crout, you have it dead on. And that's the advice I gave her, but just wanted to check and make sure I wasn't steering her wrong.

cebudragonlady

Perhaps I am missing something? The garnishment order applies to ANY payments made to the independent contractor ( whether paid hourly or by the job is immaterial)by the husband. The order HAS to be followed by the husband, and he has to garnish ANY payments due the independent contractor. Do you think that the court is going to accept an explanation attempting to get out of following this order? And note, that if the child support had been properly paid by the independent contractor in the first place, there would have been no need to get other people involved - shame on him !

Chari

Leslie

[font size="1" color="#FF0000"]LAST EDITED ON 06-20-03 AT 03:34PM (CST)[/font][p]Chari:

I'm not sure which one of us is missing something.

The garnishment is for a subcontractor, not an employee. How can one guarantee from month to month what the disposable income is? How can one contractor know if another contractor is filing the garnishment? After all this subcontractor could be working for several contractors.

This is the first time the contractor has ever received a garnishment for one of his subcontractors, and that's why he was confused. And now so am I.

cebudragonlady

Leslie-
I realize that the order is for a sub, not an employee. Even though month to month income for the sub may vary up and down, the order means WHENEVER the sub is due monies, the garnishment MUST be made. My company gets these kinds of orders too, for subs and vendors that did not pay their taxes, child support, etc. The order should specify some formula for calculating the amounts to be garnished.

Chari

cthr

>And note,
>that if the child support had been properly paid by the independent
>contractor in the first place, there would have been no need to get
>other people involved - shame on him !
>
>Chari


Just because a person has a wage garnishment does not mean that they were not paying as required. Some people prefer to have it deducted from thier paycheck so that the state disburses it and they don't have to deal with the ex. Also, it some states it is mandated that child support come out of the paycheck. In Connecticut, if you are required to pay child support, not only does it come out of your paycheck, but the company is also required to add the employee and children to the medical benefits plan if the employee is eligible.

But to the original post, if the person is not an employee of the company, I do not believe that they are required to withhold the support. They do however need to notify the issuing authority.

cebudragonlady

cthr-

If you see some of the garnishment orders aimed at subcontractors and vendors that I see - several thousand dollars for overdue back child support!..then you would realize that their problems did not happen overnight, and that paychecks to these people had NOT been garnished in the past, nor have they been paying...
My company does and will follow all court orders to garnish payments. Back to the original post - the employee's wife going to court and trying to give an explanation to get out of legally owed child support is NOT going to fly.

Chari

cthr

The vendors wife should not be going to court. The vendor should complete the form stating that the person in question is not an employee and send it back to the issuing authority. While I do understand that some people have built up arrears, I don't think all non-custodial parents should be painted as deadbeats just because they have a garnishment order.

SMace

A bit off the subject, but I know that some states are now requiring New Hire Reporting for contractors. We do our new hire reporting electronically from our headquarters in NC. I understand if you batch file all your NHR from one state you only have to follow the laws in that state. Just an FYI.

Crout

Wow, I just came back to this thread. Hey, all I know is that in Pennsylvania contractors are not employees and therefore we are not subject to garnishment orders.

Leslie

That's what I thought Crout. So I should check state laws, huh? The contractor called the court and got very little response.

cebudragonlady

Lesile-
In the court notice received by the contractor, is there language somewhere on it stating that failure to do so could result in penalties? The court is not interested in whether or not the subcontractor is an employee - so that is totally irrelevant. What matters is that based on the 1099, the court has given an order to the issuer of that 1099 to garnish payments to that subcontractor.
I am not surprised that the contractor got very little done when he called the court.


Chari

cthr

Leslie
Here is the number and contact person for the Az Child support enforcement bureau.

They would be the best place to find the answer to your question. When you find out, could you please let us all know how this was resolved.

Thanks,


Arizona Rice, Benidia
Department of Economic Security, Division of Child Support Enforcement
P.O. Box 40458, Site Code 021A
(Street Address: 3443 N. Central Avenue, 4th Floor, Phoenix, AZ 85012)
Phoenix, Arizona 85067
[email]vromero@de.state.az.us[/email]
Director: (P):602-274-7646 (F):602-274-8250
Office: (P):602-252-4045 (F):602-000-0000

annie1992

I should preface my answer by telling you I work for the Prosecuting Attorney in my small county, and have been here 25 years. One of our responsibilities is the preparation of child support orders and the pursuit of those who do not pay. In Michigan, failure to pay is a felony that carries a prison sentence, although that option is rarely taken (a non-custodial parent cannot pay if they are in prison, either).

The child support system is being "centralized" with all states reporting to the federal government. Michigan got on board fast because this year's penalties were 180 million dollars (federal money that could not be disbursed to the state because they were not in compliance). At some future point, all states will have the same regulations regarding the collection of child support, and noise is being made about having the IRS collect it (try ignoring that order, subcontractor or no.

I agree with cebudragon lady, a garnishment normally means the parent has not paid. If money is taken directly from a check it is known as an IWO (Income withholding order) not a garnishment. In my county if ANYONE, subcontractor or no, failed to comply with a court order, the Judge would hold them in contempt. An order is exactly that, an order.

On another level entirely, whether you HAVE to comply or not, it is the right thing to do. If you saw a hungry child, a cold child, a child going without, would you help, or would you shrug and go on? Children who are not receiving the support they deserve and require are going without. Legalities aside, what would you choose to do?

moneyman

"On another level entirely, whether you HAVE to comply or not, it is the right thing to do. If you saw a hungry child, a cold child, a child going without, would you help, or would you shrug and go on? Children who are not receiving the support they deserve and require are going without. Legalities aside, what would you choose to do?"

In response to this, "it is the right thing to do" still depends upon whether you deem a garnishment order applies to an outside contractor. If you follow the thread that a garnishment does NOT apply, then you will be violating the contractors right to payment if you withhold without basis.

Now, as Leslie mentioned below, I do not condone nonpayment and am not trying to find support for nonpayment, but just trying to decipher the laws. I am sure the most people would be in support of making sure that every paid their support orders, but as an employer, you can not make a decision based upon those personal opinions, but by the interpretation of the law.

I do thank Annie for the clarification on garnishment and deduction orders. It made me go back and read through the threads because I was also thinking that many court orders that I have handled had nothing to do with "deadbeat parents" but just a simple and accountable way for the parent to provide support.

moneyman

[font size="1" color="#FF0000"]LAST EDITED ON 06-26-03 AT 08:33AM (CST)[/font][p]I've just been looking around the DOL website and everything there under garnishments show a relationship between employer/employee and last time I heard, and sub-contractor was not an "employee" for purposes of most wage and hour laws. I thought I also saw somewhere that you couldn't garnish if a person was self-employed, but I don't remember where I saw that. I don't think that this person would call the company paying him an "employer" by definition of the wage laws, so I don't see how you can garnish pay. I think having an "employer" and being "employed by" are two different things in this situation.

But, the best thing was just suggested above, call your state agency and ask.

Crout

Please don't misunderstand: I have no desire to see any child hungry or cold. On the other hand, I have a duty to my company to provide sound advice, and the fact of the matter is that independent contractors are simply not employees. The question of whether or not garnishment orders apply to contractors is probably unanswerable anyway. There is most likely no hard and fast rule out there. And if you contact 2 office workers from the same Child Support Enforcement office you may very well get 2 different answers. You could look at it this way: Since the New Hire reporting systems apply to employees only, you would not register a contractor, correct? If they were not registered the garnishment order would not follow. As a matter of fact, I just went through this with the State of West Virginia. A Contractor we recently hired was mistakenly registered to PA New Hire. A few weeks later, I received a garnishment order from WV Child Support Enforcement. The guy apparently owed a ton of money in back child-support. I called WV directly and reported that the guy was an independent contractor. The office worker conferred with his boss and told me to ignore the order. Instead, I drafted a letter outlining the details and sent it off to WV. Two weeks later I received the same court order from a different office worker. I sent off the same letter to the second worker. A few days later, two agents showed up at my door from the US Dept. of Health and Human Services looking for my little contractor. The amount of support he owed triggered Federal involvement. They were quite upset that WV had sent us a garnishment order because once the Feds get involved the State is supposed to back off. We cooperated as much as we could legally, but drew the line when they wanted one of our Directors to participate in a "sting" operation. Needless to say we decided to sever out relationship with that particular Contractor, which turned out to be unnecessary. He must have been alerted somehow that something was up because he resigned by voicemail the day after the Feds came calling. By the way, the Feds haven't yet captured this guy. Anyway, that's my garnishment story and I'm stickin' to it.

Leslie

I contacted the state with an email, and ended with this:

"So, in Arizona, does the contractor have to comply with a garnishment for a subcontractor? And if so, what does he do with it if there is a month the man does no work for him? And how does he know how many other contractors have received the same garnishment?"

Interesting questions.

Now, onto "Children who are not receiving the support they deserve and require are going without." Somewhere in here I am getting the impression that folks think because I'm saying I don't believe the contractor has to pay the garnishment on the subcontractor, that I am somehow sympathetic to men trying to dodge their responsibility to their children.

I was divorced in 1990. The support became sporadic in 1993 and stopped in 1994, as soon as I got this job. My three sons were 10, 14, and 16 - pretty pricey ages for kids. My ex was union - you can't file garnishments with the union hall. So every time I'd track down what job he was working on, they'd
notify him, he'd drag up, go to the hall, and head on to the next job. I've never received a cent since. Due to other circumstances, I have decided to let it go. But it doesn't negate the fact that they were trying times indeed.

However, it does not make me look at every man in every situation as a dead beat dad. The employee came to me with a legal question. I didn't ask her about the sub...is he a good guy, has he been paying his support...yadda yadda yadda. All I'm trying to find is a legal answer.

SMace

I was notified about a month ago from our payroll guru that some states were going to begin requiring new hire reporting for contractors. My guru only works Mon-Wed. When he gets back I'll post where he recieved that info. Though it's not directly related to the question asked, I think it may be relevant in the discussion.

cthr

I don't condone non payment either. I am married to a man, who has a child from a previous relationship, we used to live in Mass which requires that all child support be a wage attachment. This deduction on his paystub was called a garnishment. I think sometimes people use the term garnishment when they really mean a court ordered deduction. I think as HR professionals we shouldn't make judgements about a person based on these items. I have had people come to work for me who through no fault of their own have had arrears, they lost thier job, they were in an accident and couldn't work. It doesn't make them bad people.

As crout and moneyman said, our responsibility is to protect our companies from liability by withholding as required, not to try and right every wrong.