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  The Illinois Income Withholding “Notice” (Order) and S.B. 100

Donald E. Ray, Ray Law Office, Rockford
(815) 713-1272 | Email Donald E. Ray | Visit Ray Law Office website

As you may be aware, the federal government has much to do with the creativity and implementation of Illinois laws regarding the collection of child support — for example, in the implementation of the state disbursement unit (SDU) system and Illinois' attempt to put that system into service through the Illinois State Disbursement Unit (ILSDU). The federal government is also responsible for the positive initiative to allow custodial parents the right to have employers served with legal documents that require the employers to withhold child support from the income of the payees. These rules can be found at 42 U.S.C. §666.

Unfortunately, what should be a benefit to the obligee, the obligor, and the employers has not yet been fully implemented in Illinois. This article addresses some common misconceptions, the current requirements of the Income Withholding for Support Act (Withholding Act), 750 ILCS 28/1, et seq., and the methods of service, with two significant issues being that the withholding document is no longer to be signed by a judge and that there is no Illinois codified form for custodial parents and attorneys to serve on employers.

The State of Illinois enacted into law at the time of the ILSDU's creation the requirement that unless the court approves an agreement by the parties to the contrary, every time an order for support is entered, an income withholding notice (notice) must be served immediately. 750 ILCS 28/20(a)(1). Prior to 1997, the existing law of the day, which was found at 750 ILCS 5/706.1, required a custodial parent or his or her attorney to complete a withholding form signed by a judge, in effect creating an income withholding order. This procedural requirement was eliminated in 1997 when the Withholding Act became effective. The current law requires that income withholding notices are to be served on and complied with by employers without any judicial approval.
An employer is entitled to limited information about the parties; a copy of a custody order that incorporates child support is not part of what any employer should be given. Thus it would appear that there is an argument to be made that the documents employers receive should comply with the Withholding Act and be consistent to assist employers in determining if they are valid, or "regular on [their] face," as stated by the federal government and in §502(b) of the Uniform Interstate Family Support Act, 750 ILCS 22/101, et seq.

Regardless of the fact that the change eliminating a court order occurred more than ten years ago with the adoption of the Withholding Act, there are still counties that use an income withholding order. For example, within the last year, I was told by an assistant county clerk that I could not file my notice and needed to use the court's form, as well as that it must be signed by the judge. I have yet to find any statute or legal authority that allows a circuit court clerk to prepare boilerplate forms to be used for the specific process of serving legal notices for child support withholding. There may have been many reasons for this significant change made by the Withholding Act, but the overall most significant impact is that a custodial parent is no longer required to go back to court to collect a delinquency from an employer. 750 ILCS 28/25. This saves time and money for the custodial parent as well as valuable court hours. In the event the obligor wishes to contest the fact that anything is owed, a court proceeding is allowed. 750 ILCS 28/25(c).

Anyone who handles more than a few child support cases each year may have realized that just last year the Illinois Department of Healthcare and Family Services (HFS) changed the caption of the form it sends to employers. The form previously was entitled "Order/Notice to Withhold Income for Child Support," but now the caption reflects a more accurate heading, "Income Withholding for Support." For the many attorneys who have served withholding notices, this change has helped combat constant questioning by employers, who previously initially denied applying these notices because the state form used the word "Order" in the title regardless of the fact that a judge's signature was not included.

Of the 102 Illinois counties, there are perhaps 20 — 30 different withholding forms being provided through circuit clerks' offices and state-funded legal aid sites. Some counties simply hand out a document to withhold support as long as you provide a case number and identification, while many other county clerks provide something held out as a "withholding form" to be downloaded from their websites. However, many of the forms fail to comply with the simple requirements of the Withholding Act. In addition, many forms request personal information that is not to be provided.

For example, two of the forms contain text input boxes for children's social security numbers. A child's social security number was formerly required under §20(c)(9) of the Withholding Act, but this information is no longer to be listed pursuant to P.A. 94-43 (eff. Jan. 1, 2006). Another form fails to list that a penalty exists for an employer if it fails to withhold, as required in §20(c)(7) of the Withhold Act, and two forms refer to a state law (750 ILCS 5/706.1) that is no longer effective. One form requires a driver's license number and the residential address of the custodial parent despite the fact that the employer has no right to know any of the custodial parent's personal information. At the very least, the fact that no two of the forms are alike should give rise to a presumption that some, and possibly all, must be erroneous.

The following are the technical requirements that each income withholding notice must contain:

(c) The income withholding notice shall:

(1) be in the standard format prescribed by the federal Department of Health and Human Services; and

(1.1) state the date of entry of the order for support upon which the income withholding notice is based; and

(2) direct any payor to withhold the dollar amount required for current support under the order for support; and

(3) direct any payor to withhold the dollar amount required to be paid periodically under the order for support for payment of the amount of any arrearage stated in the order for support; and

(4) direct any payor or labor union or trade union to enroll a child as a beneficiary of a health insurance plan and withhold or cause to be withheld, if applicable, any required premiums; and


(5) state the amount of the payor income withholding fee specified under this Section; and


(6) state that the amount actually withheld from the obligor's income for support and other purposes, including the payor withholding fee specified under this Section, may not be in excess of the maximum amount permitted under the federal Consumer Credit Protection Act; and


(7) state the duties of the payor and the fines and penalties for failure to withhold and pay over income and for discharging, disciplining, refusing to hire, or otherwise penalizing the obligor because of the duty to withhold and pay over income under this Section; and


(8) state the rights, remedies, and duties of the obligor under this Section; and


(9) include the Social Security number of the obligor; and


(10) include the date that withholding for current support terminates, which shall be the date of termination of the current support obligation set forth in the order for support; and


(11) contain the signature of the obligee or the printed name and telephone number of the authorized representative of the public office, except that the failure to contain the signature of the obligee or the printed name and telephone number of the authorized representative of the public office shall not affect the validity of the income withholding notice; and


(12) direct any payor to pay over amounts withheld for payment of support to the State Disbursement Unit.
750 ILCS 28/20(c).

Most of the above requirements seem obvious. However, a few deserve a closer look when pondering whether a form being used is compliant with federal and Illinois law.

Section 20(c)(1).
How many attorneys would even know where to look for the "standard format prescribed by the federal Department of Health and Human Services" (DHHS) as required by §20(c)(1)? That "standard format," which has gone through several changes in the last decade, is spelled out in Form OMB-0970-0154, Income Withholding for Support, created through the DHHS Office of Child Support Enforcement (OCSE) in October 2007 and available online in both Word and PDF formats at http://www.acf.hhs.gov/programs/cse/forms/. Any form created or downloaded from a different source must comply with this form. A key point in the form is the requirement that unless the notice is being sent by the state or a tribal child support enforcement agency one must send along with the notice a copy of the law that allows the obligee to send the notice (in Illinois, §20(g) of the Withholding Act). The DHHS form is subject to review and potential modification in 2010.

Section 20(c)(1.1). The requirement under §20(c)(1.1) to "state the date of entry of the order for support upon which the income withholding notice is based" is extremely helpful when an employer is served with multiple notices, which typically happens when the State of Illinois has been involved with the case. More often than not when an employer receives a notice from the attorney for the custodial parent and a notice from the State of Illinois that include different withholding amounts, it is due to the fact that the order for support in the state's system is no longer current, perhaps because counsel failed to notify the state of the new court order changing custody and switching the support obligation.

All an employer is required to do is honor the withholding notice that is proper on its face, and if all employers would follow the notice that has the most recent order date as required by §20(c)(1.1), many problems would be avoided. Thus it is crucial that all notices list the date the order for support was entered.

Section 20(c)(7).
Regarding the §20(c)(7) requirement that the notice "state the duties of the payor and the fines and penalties for failure to withhold and pay over income and for discharging, disciplining, refusing to hire, or otherwise penalizing the obligor because of the duty to withhold and pay over income under this Section," it should be noted that there have been multiple changes to the "Duties of Payor" section of the Withholding Act, §35, over the years. This is the same section that provides for the $100-per-day penalty. Because there have been so many changes, it is important that the form used reflects the current requirements of the employer; thus, a form that refers to "§706.1" clearly is not proper on its face and may cause one to lose the right to seek the penalty altogether.

To illustrate, I was counsel in an employer penalty case that was dismissed due to the fact that the "Order/Notice to Withhold Income for Child Support" served by the former Illinois Department of Public Aid failed to state, as required by §20(c)(7), that a penalty would be incurred if the employer failed to withhold. Shortly after the ruling, the state amended the form it uses to include such a provision. To address this requirement, I have included in my form the entire section regarding the penalty, thus allowing no excuses for the employer.

Section 20(c)(10).
My advice to any employer who receives a notice that does not include a termination date as required by §20(c)(10) is to return the notice and inform the sender that the notice is deficient in that it is not "regular on its face." The fulfillment of this requirement should be very simple in that by statute the underlying order for support requires that a termination date be listed, so all one need do is simply fill in the blank on the notice with this same date. Employers have many rules and guidelines to follow when it comes to withholding, and it is unrealistic for them to guess when the withholding process is to end.

Section 20(c)(12).
Under §20(c)(12), if an income withholding notice is to be used, the funds withheld by the employer can be mailed only to the ILSDU; employers cannot be directed to send payments to an attorney or the location of choice of the person or agency that served the notice. This requirement is tied directly to laws established in 1999 regarding federal funding to the states and compliance with the use of SDUs. The ILSDU's address is Illinois State Disbursement Unit, P.O. Box 5400, Carol Stream, IL 60197-5400. The website is http://www.ilsdu.com/.

Recommendations for the future.
Based on my experience and discussions with other attorneys, I think it would be in the best interests of all parties, including employers, for Illinois to adopt a single, uniform notice form. This would provide consistency for employers and ensure that all personal information that should be included is — nothing more, nothing less. This form should become part of the Withholding Act so that it would be freely available to the public; for example, through the Illinois General Assembly's website, http://ilga.gov/.

I believe that the standardized federal form can be enhanced to cover the additional distinctions of Illinois law that are not personal to either of the parties. For example, in addition to the existing language of the section entitled "Liability" on page 2 of the federal form, the form should include the complete text of the employer's statutory duties pursuant to §35 of the Withholding Act. I suggest the following requirements be added to the current law regarding the form and the service of the form:

a. Employers should be required to follow the notice with the most recent court order date as opposed to the most recent date of mailing or service.

b. The $100-per-day penalty should be incurred only if it can be established that the notice was received by the employer or service agent, with the burden of proof on the person or agency sending the notice. A presumption of receipt should exist if withholding by the employer from the income of the obligor did occur for the amounts listed in the notice allegedly sent and commencing after the date of service. This concept is in contradiction to both the existing law, which requires the employer to have received notice by certified mail, return receipt requested, and the current proposed legislation, S.B. 100, 96th Gen.Assem. (2009), discussed in detail below.

c. A notice should not be able to be used for day care costs unless a specific amount is ordered to be paid as an additional part of an order for support

d. The state should be required to complete the program to allow for notices to be delivered by electronic mail, called "e-IWO," and provide the form to be used for free.

e. Any time an obligee or state agent serves a notice, there should be a duty to ensure the notice served reflects the current order of the court.

Methods of delivery.
The current law states that a notice may be served on an employer by multiple methods, such as mail or personal delivery. 750 ILCS 28/20(g). However, to protect the client against the potential of a noncompliant employer, the notice must have been served by certified mail pursuant to §35(a). There has been no analysis in caselaw as to whether the penalty can be incurred if service was in fact established by one of the legal delivery methods specified in §20(g). It appears to be insufficient if one can prove only that service was accomplished by one of the other methods authorized by the Withholding Act.

To further strengthen the argument that not all methods for service as prescribed by the Withholding Act are acceptable to enforce the penalty, the Illinois State Bar Association, along with counsel for HFS, has proposed that in addition to certified mail one could also have the employer served by a special process server or through the sheriff. This proposal has turned into S.B. 100. The mere fact that the methods of §20(g) are not included in the proposal clearly suggests that even if such methods of service as facsimile or e-mail are proved, the penalty cannot be enforced. I believe that all forms of service listed in the Withholding Act should be allowed but that the burden of proving the employer was in fact served with a proper notice should fall on the sender of the notice. I have served close to a hundred employers by e-mail or fax with a simple confirmation by the employer. These methods costs next to nothing, not to mention the time they save. Additionally, they are of benefit to the employer in that the notice can be sent to the specific person in the company who needs to receive the notice as opposed to the mail clerk or the person who happens to be there to sign for the certified mail when it is delivered. I have had more than one employer complain when I sent notice by certified mail to the registered agent. More often than not, when service is sent to a registered agent by certified mail, the grace period to withhold is nearly exhausted by the time the proper person receives the paperwork.

Regardless, one should be aware of the federal government's effort to allow for electronic service. Illinois is one of the states that has not adopted an "e-IWO." I have been told by both an Illinois state representative and an OCSE staff member that there could be a program in effect this summer. To read more about the "e-IWO" program, visit www.acf.hhs.gov/programs/cse/newhire/employer/eiwo/eiwo.htm.
In the event S.B. 100 becomes law, counsel representing the custodial parent essentially will be required to predict the compliance risk of the employer each time an order for support is entered and choose whether to send notice by certified mail or through one of the two new proposed means. If sent by certified mail, it may take up to two weeks for the notice to be returned as non-deliverable, and then at a minimum another week for direct service, followed by the 14-day grace period following the next pay period. In reality, attorneys will be forced to have their clients pay to have withholding notices personally served each time to protect against providing poor results.

As it stands, there is much that can be done to improve the uniformity of the notice. This uniformity and greater availability to the public could bring certainty to employers as well as enhance the ability of custodial parents to bring actions against noncompliant employers by eliminating the possibility that the employers simply did not know what was required.

 
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