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Washington Enacts Lump Sum Reporting for Child Support

06/01/23

Author: ADP Admin/Tuesday, May 30, 2023/Categories: Compliance Corner

Washington Governor Jay Inslee has signed into law House Bill 1262 establishing a requirement for employers to report lump sum payments , such as a bonus, to the Division of Child Support (DCS) where the employer has received a withholding order on the employee’s wages for child support.  The law is effective July 23, 2023.   

The Details: 

House Bill 1262:

·       Requires an employer to notify the DCS before making any lump sum payment of $500 or more to a parent who is responsible for child support where the income withholding order “includes a provision for payment toward child support arrears.”

·       Permits the employer to disburse one-half of the disposable earnings portion of the lump sum payment to the responsible parent and prohibits the employer from disbursing the remaining amount of the lump sum payment within a specified time period after notifying the DCS.

·       Requires the DCS to respond to the notifying employer by releasing the lump sum payment for disbursement to the responsible parent or by specifying the amount of the lump sum payment to be remitted to the DCS on behalf of the responsible parent.

·       Exempts an employer from liability for reporting or withholding and remitting a lump sum payment.

 

The legislation defines lump sum payment as “income other than a periodic recurring payment of earnings on regular paydays and does not include reimbursement for expenses. Lump sum payment includes, but is not  limited to, discretionary and nondiscretionary bonuses, commissions, performance bonuses, merit increases, safety awards, signing bonuses, moving and relocation incentive payments, holiday pay, termination pay, and severance pay. Lump sum payment also includes workers' compensation, insurance settlements, and personal injury settlements paid as replacement for wages owed.”

Next Steps:

Employers in Washington who have or will receive income withholding orders on its employees for child support should review House Bill 1262 with their legal counsel and implement the necessary procedures to comply with the lump sum reporting to the DCS.

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