Withholding on Contract Employee (Jan. 2003)

Question: “We have come across a situation in which a CS-89 was issued to a trucking company. The employer just called and explained that they do not withhold anything from his pay, such as federal taxes, social security, etc. The employer gives him a 1099 at the end of each year and he is required to pay taxes himself. The employer is questioning whether or not they are to withhold the CS as directed by the CS-89 since he is technically not their employee....he is under "contract". So, my question is....is the employer still obligated to withhold the child support?”

PPS Clarification: Can you find out how the terms of the obligor's contract on how he/she is paid? Does he have a yearly contract or does he just get paid by the job, etc.

Caseworker Clarification: “He just gets paid by the job. He gets a certain percentage of each load he hauls. He gets paid on a weekly basis for the total percentage of what he hauled during that week.”

Answer: Yes, the employer is liable for the withholding of child support regardless of whether he withholds taxes. The employer must comply with federal and state laws and regulations. Section 466(b)(1) of the Social Security Act requires withholding in the case of each noncustodial parent against whom a support order is or has been issued or modified in the State. You may access the Act at: http://www.ssa.gov/OP_Home/ssact/title04/0466.htm.

According to federal Policy Interpretation Questions (PIQ) 99-02, question no. 5 below, the employer must comply with the CS-89.

"Question 5: Is the Federal Standard Order/Notice to Withhold actually an Order or is it a Notice to employers to withhold?

Response: It is both a notice to the employer and an order to which the employer must comply. Federal law requires that all IV-D orders and those non-IV-D orders issued after 1/1/94 must contain provisions for withholding. The Order/Notice is meant to both notify the employer of the withholding requirement in a judicial or administrative support order as well as compel the employer to comply. In addition, no employer may require that the State IV-D agency or agent of the court provide a copy of the actual support order, nor may they require that the Notice to withhold be served via certified, or any other special type of mail (see DCL-98-107)." See Kentucky Revised Statute (KRS) 405.465 (2) and (3) at: http://www.lrc.state.ky.us/krs/405%2D00/465.pdf. KRS 405.465 (3) and (4) specifically states:

(3) The court shall order either or both parents who are obligated to pay child support, medical support, or maintenance under this section to assign to the Cabinet for Families and Children that portion of salary or wages of the parent due and to be due in the future as will be sufficient to pay the child support amount ordered by the court.

(4) The order shall be binding upon the employer or any subsequent employer upon the service by certified mail of a copy of the order upon the employer and until further order of the court. The employer may deduct the sum of one dollar ($1) for each payment made pursuant to the order.

Please read the definitions for income and earnings in KRS 205.710, which can be accessed at: http://www.lrc.state.ky.us/KRS/205- 00/710.PDF,

In addition, according to KRS 405.467(10) the employer shall be held liable to the cabinet for any amount which the employer fails to withhold from earnings due an obligor following receipt of an order to withhold earnings. And, pursuant to 405.991 (1) Any person or corporation violating the provisions of KRS 405.465 or 405.467 shall be fined not more than five hundred dollars ($500) or be imprisoned in the county jail for not more than one (1) year, or both.

Also, remember that if the obligor has been ordered to provide health insurance and health insurance is available to this obligor through the trucking company, then you must send the National Medical Support Notice (CS-72).