15-P-020 Lump Sum Income Withholding Orders (December 12, 2014)
Informational Circular No.: 15-p-020
Effective Date: Immediately
Contact Name: Jennifer Holthaus
Ph: (785) 368-6313
Approval: Nancy Ruoff (Original Signature on File)
Summary: Changes to Procedures for Lump Sum Income Withholding Orders
In September 2013, Payroll Services issued payroll informational circular 14-P-006, Implementation of Lump Sum Withholding Orders per HB2015. HB2015, passed during the 2013 Legislative Session, requires a 14-day notice be provided to the Department of Children and Families (DCF) prior to a lump sum payment being made by a payor (employer) to an obligor (employee) for whom an active income withholding order (IWO) with an arrears amount has been served on the employer. The 14-day notice is required in order to allow DCF to request a new IWO specifying the amount the employer is required to withhold from the lump sum payment. Legislation allows the employer the right to withhold up to 100% of the lump sum wages to pay towards the IWO arrears amount.
As a full year has passed since implementation of the Lump Sum IWO legislation, DCF Child Support Services division has conducted a review of the procedures and has notified Payroll Services of the following change going forward:
While maintaining the legal right to withhold up to 100% of the lump sum wages, DCF’s intent is to cap the withholding on lump sum wages at 50% of the lump sum bonus going forward. In order to implement the 50% cap on lump sum wage withholding going forward, DCF will be modifying the existing lump sum income withholding orders issued to Payroll Services to specify on the order a flat dollar amount to be withheld. This will require Payroll Services to provide to DCF the amount of the anticipated bonus when providing the notification to DCF. Payroll Services has made modifications to the KPAY226 “Employees with Title IV-D IWO Garnishments with Arrears”, to include the known amount of the longevity bonus an employee is to receive. For employees identified on the KPAY226 as requiring notification of lump sum payments, any future payment related to leave payouts will require the agency to provide the following information
- Employee Name
- Estimated pay check date of the lump sum payment
- Total hours (Sick and Vacation, if both are to be paid) to be paid to employee
to Jennifer Holthaus in Payroll Services at Jennifer.Holthaus@da.ks.gov NO LATER THAN 21 DAYS PRIOR TO THE CHECK DATE ON WHICH THE PAYMENT IS SCHEDULED TO BE PAID. A calculation of the total amount to be paid to the employee for leave payouts will be provided to DCF, based on the information provided by the agency. DCF has been made aware that in the case of leave payouts, this may be an estimated lump sum amount if it is provided prior to the actual pay period in which the payout occurs. DCF is in agreement with that approach as they are retaining the legal right to withhold up to 100% of the bonus amount.
Printable version of 15-P-020