The Journal of The DuPage County Bar Association

Back Issues > Vol. 20 (2007-08)

Employer Liability in Domestic Relations Law: The Income Withholding for Support Act’s Overlooked Remedy in Child Support Enforcement
by Henry D. Kass

Aside from proceedings for dissolution of marriage, child support enforcement has become the quintessential, if not unavoidable, component of the domestic relations attorney’s practice. The social impact over the increase in the number of parents who are now obligated to pay child support and the collective arrearages, which have accumulated a result thereof, has sparked demand for more effective child support enforcement remedies. The heightened relevance of this dilemma has motivated lawmakers to develop new tactics to aid their constituents in collection efforts. Illinois’ Deadbeats Most Wanted List, enacted in 2002, permits the State under Section 12-12.1 of the Public Aid Code1 to publish on the Department of Healthcare and Family Services’ website2 a picture, name and address of any obligor parent whose arrearages is in excess of $5,000. Moreover, on October 1, 2006, the federal government, under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), amended the Passport Denial Program to lower the required amount of a parent’s child support arrearages necessary to deny their application for, or renewal of, a U.S. passport from $5,000 to $2,500.3 Notwithstanding these ingenious efforts other preexisting remedies, which are more particular to private practitioners, such Section 35 of the Income Withholding for Support Act, remain oftentimes overlooked.

The United States’ population growth as well as the ever changing makeup of its societal values has led to a rise in the awareness surrounding the child support enforcement dilemma. The United States’ population is increasing at the rate of approximately 2.7 million people annually.4 The population growth of 32.7 million people between 1990 and 2000 represents the largest census-to-census increase in American history.5 What’s more, albeit down in recent years from 3.8 per 1,000 population in 2005 to 3.6 in 20066, the average divorce rate for the past eighteen years is still nearly double that of a half century ago.7 In addition, the moderate decrease in the rate of divorce is not necessarily indicative of the growing number of parents obligated to pay child support. An increasing number of individuals are electing to have children without the formality of a legal union. Over four million infants are born each year in the United States.8 As of 2002 approximately one third of those births were to individuals who elected not to marry.9

Assuming that there is a direct correlation, the statistics of the preceding paragraph reflect the substantial increase in the number of individuals who have duties to pay child support. This increase has impacted the number of claims both in post decree and parentage cases that seek to enforce payment of child support arrearages. This has, in turn, resulted in the heightened awareness of domestic relations practitioners regarding the effectiveness of remedies available to their clients and the legal costs involved with employing those remedies. The trite petition for rule to show cause and finding of indirect civil contempt of court has produced an echo of common complaints from clients. Of specific concern is the fact that the cost involved for a private attorney to litigate a child support enforcement matter is oftentimes greater than the amount of child support arrearages sought to be recovered. Although petitions for the payment of attorney’s fees are an available remedy to the problem, such petitions necessarily require at least one additional hearing and several other court appearances in order to obtain the relief sought. In many instances, a mere money judgment is entered on behalf of the client and against the obligor parent which thereby deprives the client, who is typically already in financial straits, of any immediate pecuniary relief. What’s more, the clients lack the savvy required to enforce the money judgment against the obligor parent yet remain unrelieved of their obligations to pay their attorneys for the services rendered.

The Overlooked Remedy. Although the Illinois General Assembly and the federal government alike have invented new means to assist in the collection of child support arrearages such as the Deadbeats Most Wanted List and the Passport Denial Program respectively, many are of little or no use to the private practitioner. On the other hand, some of those statutory tools available to private practitioners, such as the Income Withholding for Support Act, several remain overlooked. The Income Withholding for Support Act (hereinafter "the Act"), however, deserves a second glance. Although perhaps not as universally applicable to child support enforcement matters as the petition for rule to show cause, it does provide for a more lucrative means of enforcing child support. Section 35 of the Act entitled "Duties of Payor" sets forth, in pertinent part, that:

"It shall be the duty of any [employer] who has been served with an income withholding notice to deduct and pay over income as provided in this Section…If the [employer] knowingly fails to withhold the amount designated in the income withholding notice or to pay any amount withheld to the State Disbursement Unit within 7 business days after the date the amount would have been paid or credited to the obligor, then the [employer] shall pay a penalty of $100 for each day that the amount designated in the income withholding notice (whether or not withheld by the [employer]) is not paid to the State Disbursement Unit after the period of 7 business days has expired."10

The purpose of the Act, to promote self-enforcement and to deter future noncompliance by the obligor parent’s employer, is accomplished by the potential imposition of the $100 a day statutory penalty against an otherwise disinterested third party.11 Although the prospect of an employer fined only $100 per day may appear de minimis, over short periods of time the statutory penalty can quickly accumulate to a substantial sum. This is due to the fact that the $100 a day penalty for each day that the withheld amount is not paid does not refer to all withheld amounts, but rather, requires that a new penalty of $100 per day be assessed for each withheld amount not timely forwarded to the State Disbursement Unit.12 Thus, as in Grams v. Autozone, Inc.55, where an employer failed for 72 days to timely turn over child support withholdings from six of the obligor parent’s paychecks, the penalty was not properly calculated merely by multiplying $100 times the number of days that the employer failed to pay support.13 Rather, the Third District Appellate Court held that pursuant to the plain language of the statute, the proper calculation is to add the total number of days for each period in which the employer failed to withhold support and multiply the aggregate by the statutory penalty.14 As such, in Grams, the total number penalty days were actually 207 or $20,700, as opposed to only 72 penalty days or $7,200.15

Representing the Obligee Parent. Under Section 35 of the Act, in order to preserve a client’s rights it is mandatory that an Order for Support be entered with the court and a Notice to Withhold Income immediately served upon the obligor parent’s employer. This is particularly true in those circumstances where the obligor parent has an ownership or suspected ownership interest in the employer business. Because obligor parents may profess ignorance regarding the internal administration of the business and therefore believe themselves immune to a petition for rule to show cause, the continual accrual of statutory penalties, regardless of the obligor parent’s individual intent, is extremely persuasive to ensuring future compliance.

Fourteen days following the date that the Notice to Withhold Income is mailed, sent by facsimile or other electronic means, or placed for personal delivery or service, the employer must withhold the amount required in the Notice upon the next payment of income which is payable to the obligor parent that occurs. Although the clerk’s office is responsible for serving the employer, in order to serve the client’s best interests, a safer practice is for the attorney to send an additional copy of the Notice to Withhold Income to the employer by certified mail. This is because a finding of an employer’s nonperformance within the time required under the Act must be documented by certified mail return receipt showing the date that the Notice to Withhold Income was served.16

Once this first payment of income that occurs fourteen days after the Notice to Withhold Income is sent, the employer has an additional seven business days to send the designated amount to the State Disbursement Unit.17 Should the employer fail to withhold and pay the required support within the time prescribed, the obligee parent, pursuant to Section 50 of the Act, has the right to file a complaint against the employer. That is not to say, however, that the obligee parent is under any obligation to immediately file a complaint or otherwise alert the employer as to its failings. To the contrary, clients are well advised instead to at least initially maintain their silence. This is due to the fact that upon any subsequent failure by the employer to withhold and timely pay the required support, the Act creates a presumption that the employer acted knowingly.18 Because employers’ predominant defense for failure to comply with the Notice to Withhold Income is that they did not knowingly do so, an obligee parent’s legal position is significantly enhanced by delaying the filing of a complaint at least until the presumption has been created.

When ultimately filing a complaint on behalf of the obligee parent, the domestic relations practitioner must be mindful to select the appropriate venue since a cause of action initiated under Section 35 of the Act is not against the obligor parent, but rather the employer. That is not to say, however, that in a situation were litigation is already pending against the obligor parent, the employer cannot be joined as a third party defendant pursuant to Section 405 of the Illinois Code of Civil Procedure.19 In fact, since oftentimes the potential for a claim may simultaneously exist against both the obligor parent and the employer, the more economical and time conservative practice would be to first initiate a claim against the obligor parent followed by a motion for joinder of the employer.

At trial, the domestic relations attorney may establish a large portion of his or her client’s case merely by submitting to the court a certified copy of the printout of the payments made by the employer to the State Disbursement Unit. Because the document is a certified public record which is kept by a public office, it is an exception to the rule against hearsay and does not have any foundational requirements to be received into evidence.20 The employer’s defense is thus reduced to the denial that any failure to comply with the Notice to Withhold Income was not knowingly done. So long as the aforementioned statutory presumption has been created, the obligee parent is advantageously situated. In fact, greater argument may transpire not over the liability of the employer, but rather, the extent of the liability, i.e. the calculation of the penalties.

Representing the employer. As a result of some of the arguably disproportionate penalties that employers have suffered over the past several years, attorneys have attempted to assert a constitutional challenge to Section 35 of the Act. "The due process clause prohibits the legislature from imposing a statutorily created penalty ‘so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable.’"21 "A statutory penalty [however] is subject to the lowest level of constitutional review and therefore will survive a due process challenge if it bears a rational relationship to a legitimate governmental interest."22 In the case of Gram v. Autozone, Inc., the employer argued to the Third District Appellate Court that the exponential increase in the fines permitted by Section 35 of the Act could be devastating to any business.23 Although the employer’s argument hinted at the unconstitutionality of the statutorily imposed fine because it focused primarily instead on the trial court’s interpretation of Section 35, the argument fell short of a viable due process challenge.24 Nevertheless, the employer argued in the alternative that the amount of the fine imposed was unjust since it could have been fined a total of only $200 under Section 50 of the Act if it had entirely failed to withhold the child support payments from the obligor parent’s paycheck.25 The Third District Appellate Court, however, found this argument to be irrelevant and as such declined to consider it further.26 The Second District Appellate Court found a strikingly similar argument more persuasive in reaching its decision in In re Marriage of Miller, 369 Ill.App.3d 46, 860 N.E.2d 519, 307 Ill.Dec. 865 (2nd Dist. 2006). In Miller the trial court fined the employer $1,172,100 in accord with Section 35 of the Act. On appeal, the Second District noted that the penalty imposed against the employer under Section 15(d) of the Non-Support Punishment Act was forty-seven times greater than the maximum criminal fine of $25,000 that the legislature found necessary to ensure a spouse’s compliance with a child support obligation.27 The Second District reasoned that the gross disparity between the $1,172,100 penalty and the aforementioned maximum criminal fine demonstrated that the penalty was wholly disproportionate to the employer’s offense and was therefore obviously unreasonable as applied.28 In its majority opinion, the Second District cited State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) in support of its finding that the penalty imposed violated the employer’s due process rights.29 Surprisingly, only two years prior the Second District in In re the Marriage of Chen, 354 Ill.App.3d 1004, 820 N.E.2d 1136, 290 Ill.Dec. 69 (2nd Dist. 2004) declined to accept an employer’s due process claim against Section 35 of the Act in which the employer cited the holding in State Farm Mutual in support of its constitutional challenge.

On March 28, 2007, The Illinois Supreme Court in Miller granted a Petition for Leave to Appeal and on November 29, 2007 [opinion not final at publication time] delivered an analysis of the Second District’s aperture. The Illinois Supreme Court noted that the Second District "cited State Farm only for the limited proposition that, ‘[i]f a penalty is grossly excessive, it does not further a legitimate government purpose and constitutes an arbitrary deprivation of property." [sic]30 The Court reasoned that the excessiveness test applicable to jury awards of punitive damages at issue in State Farm had no relevance to the calculation of the statutory penalty at issue in Miller.31 In fact, the Court noted that the Second District had so held previously in Chen.32 The Court further reasoned that since the Second District failed to take into consideration that an obligor parent may receive up to three years in the Illinois state penitentiary in addition to the statutory fine of up to $25,000, its comparison of Section 35 of the Act with Section 15(d) of the Non-Support Punishment Act did not provide a sufficient basis for holding Section 35 unconstitutional.33 After referencing and analyzing several United States Supreme Court opinions, the Court held that the State has a compelling interest in supporting children and combating the crisis of child support delinquency.34 The Court reasoned that to accept an employer’s substantive due process challenge, all that the employer would have to do to evade any penalty would be nothing at all.35 The Court further reasoned that because an employer controls the extent of the penalty it cannot therefore complain that it is too harsh.36 In so holding, the Court reversed the judgment of the Second District and affirmed the circuit court’s $1,172,100 penalty in favor of the obligee parent.37

Since the Illinois Supreme Court struck down the viability of any substantive due process challenge, employers properly served with a Notice to Withhold Income have little remaining defense other than to assert that their failure to withhold or pay child support was not a knowing violation of the Act. Pursuant to Section 35, the Court is required to impose the penalty of $100 a day only where it finds that the employer knowingly failed to comply with a Notice to Withhold Income.38 An analysis of this issue can be found in the cause of Thomas v. Diener, 351 Ill.App.3d 645, 814 N.E.2d 187, 286 Ill.Dec. 537 (4th Dist. 2004). In Thomas, the obligee parent brought suit under Section 35 of the Act against the obligor parent’s employer, Chesterville Elevator.39 The obligee parent alleged that Chesterville Elevator failed to make certain child support payments and that as such she was entitled to $153,500 in statutory penalties.40 The employer testified that his son, Darrell, handled payroll.41 The employer testified that that it was the business’s regular and common practice to withhold the required support amount each week from the obligor parent’s paycheck and to send two checks together every two weeks to the State Disbursement Unit.42 The employer acknowledged that when reviewing payroll checks he discovered that a support payment from approximately one and a half years prior had inadvertently not been mailed.43 Upon his discovering the mistake, the employer immediately delivered a check for the sum of $77 to the obligee parent’s attorney.44 The son, Darrell, also testified that he had never received a Notice to Withhold Income before but that he would mail two checks together every two weeks to the State Disbursement Unit, regardless of whether or not the obligor parent worked that particular week.45 Darrell testified that since the town in which they were located did not have a post office, the checks were mailed by placing them in business’s mailbox.46 Darrell acknowledged that two support checks were returned to him by the State Disbursement Unit because he had not made them out to the appropriate payee.47 At the conclusion of trial, the court awarded the obligee parent $87,300 in penalties.48 The employer thereafter timely appealed. The Fourth District Appellate Court held that the trial court’s finding of fact, that the employer knowingly failed to withhold and pay child support, was against the manifest weight of the evidence and reversed the lower court’s ruling.49 The Fourth District reasoned that the employer was cognizant of the duty to forward the child support within seven business days, that the employer did not intentionally disregard its obligations, and that any violations by the employer were simply an oversight and not a knowing violation of the Act.50

Employers must likewise be cognizant of the fact that under the Act they are also liable to their obligor parent employees. Section 35(c) adopts and incorporates into the Act the federal Consumer Credit Protection Act.51 The federal Consumer Protection Act limits the amounts that an employer may deduct from an employee’s paycheck regardless of the actual support amount contained within the Notice to Withhold Income.52 Moreover, Section 60 of the Act states that that the rights, remedies, duties, and penalties created by the Act are in addition to, and not in substitution for, any other rights, remedies, duties and penalties created by any other law.53 Thus, when an employer withholds more than the amount permitted under the federal Consumer Protection Act or as in the case of Giles v. General Motors Corporation, 344 Ill.App.3d 1191, 802 N.E. 2d 858, 280 Ill.Dec. 607 (5th Dist. 2003) continues to withhold income past the date specified in the Notice to Withhold Income, the obligor parent employee may bring suit against the employer for, inter alia, conversion, negligence, or breach of contract.54

Conclusion. When faced with the dual liability that employers are subject to under the Act, the expense necessarily involved with litigation and the potential for incremental penalties, preventative measures are the best means for protecting an employer client. Attorneys should advise their clients to be alert to receiving a Notice to Withhold Income whether they are the in-house counsel for a large corporation or simply handle a small business’ annual minutes. The attorney, instead of relying upon the human resources or paychecks department to perform the task, should immediately review any Notice to Withhold Income and calculate the proper amounts to be deducted in accord with the federal Consumer Protection Act. Attorneys must take special care to instruct their clients that the amounts to be deducted must be both made payable and sent to the State Disbursement Unit within statutory time allotted and not sent to the obligee parent directly. This is because even an amount timely sent to the State Disbursement Unit but made payable to the obligee parent will be automatically returned to the employer with an explanation that the payment has been made to an "unacceptable payee". Because, however, the duration of time that the State Disbursement Unit takes in notifying an employer is lengthy, several weeks of penalties will have most likely already accrued. As for the domestic relations practitioner, Section 35 of the Act provides an obligee parent with a defendant that is more likely to pay the amount owed and less likely to repeat the violation thereafter in contrast with an obligor parent who is subject only to a petition for rule to show cause. Because obligee parents are entitled not only to receive the support arrearages due and attorney’s fees incurred, but also the penalties assessed against the employer, they are more likely to perceive that they have been appropriately compensated and that the administration of justice has been effective.

1 305 ILL. COMP. STAT. 5/12-12.1 (West 2007).

2 Rod R. Blagojevich, Governor, Illinois Child Support Enforcement: Wanted for Failure to Pay (visited Nov. 24, 2007) <http://www.ilchildsupport.com/deadbeats/>.

3 22 C.F.R. § 51.70 (2006).

4 U.S. Census Bureau, Population Division, Interim State Population Projections, 2005. (internet release date: April 21, 2005) <http://www.census.gov/population/projections/PressTab1.xls>.

5 MARC J. PERRY & PAUL J. MACKUN, POPULATION CHANGE AND DISTRIBUTION: CENSUS 2000 BRIEF (U.S. Dept. of Commerce Economics and Statistics Administration, U.S. Census Bureau) (April 2001).

6 U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics, Monitoring the Nation’s Health, June 2007 (visited Oct. 31, 2007) <http://www.cdc.gov/nchs/pressroom/data/MNH_0607.htm>.

7 STEPHANIE J. VENTURA, M.A., DIVISION OF VITAL STATISTICS, NATIONAL CENTER FOR HEALTH STATISTICS & CHRISTINE A. BACHRACH, Ph.D., NATIONAL INSTITUTE OF CHILD HEALTH AND HUMAN DEVELOPMENT, NATIONAL VITAL STATISTICS REPORTS VOL 48, NO. 16, Nonmarital Childbearing in the United States, 1940-99. (October 18, 2000) (U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics, National Vital Statistics System).

8 See supra footnote 7.

9 See supra footnote 7.

10 750 ILL. COMP. STAT. 28/35(a) (West 2007).

11 Grams v. Autozone, Inc., 319 Ill.App.3d 567, 745 N.E.2d 687, 253 Ill.Dec. 564 (3rd Dist. 2001).

12 Id. at 569, 689, 566 (Emphasis added).

13 Id. at 569, 690, 567.

14 Id. at 570, 690, 567.

15 Id.

16 750 ILL. COMP. STAT. 28/35(a) (West 2007).

17 See Thomas v. Diener, 351 Ill.App.3d 645, 814 N.E.2d 187, 286 Ill.Dec. 537 (4th Dist. 2004) (holding that Saturday is not a "business day" for purposes of determining whether an employer complied with Section 35 of the Act even where employer is open for business on that day. Section 35 defines "business day" as a day on which State offices are open for regular business and State offices are not generally open for regular business on Saturdays).

18 See 750 ILL. COMP. STAT. 28/35(a) (West 2007); See also In re the Marriage of Chen, 354 Ill.App.3d 1004, 820 N.E.2d 1136, 290 Ill.Dec. 69 (2nd Dist. 2004).

19 See 735 ILL. COMP. STAT. 5/2(a) (West 2007).

20 See People v. Lacey, 93 Ill.App.2d 430, 235 N.E.2d 649 (3rd Dist. 1968).

21 Express Valet, Inc. v. City of Chicago, 373 Ill.App.3d 838, 869 N.E.2d 964, 311 Ill.Dec. 95 (1st Dist. 2007) citing St Louis, Iron Mountain & Southern Ry. Co. v. Williams, 251 U.S. 63, 66-67, 40 S.Ct. 71, 73, 64 L.Ed. 139, 141 (1919).

22 Id. citing People v. Farmer, 165 Ill.2d 194, 207-08, 209 Ill.Dec. 33, 650 N.E.2d 1006 (1995).

23 Gram at 570, 690, 567.

24 Id.

25 Id. at 571-572, 692, 569.

26 Id.

27 In re Marriage of Miller, 369 Ill.App.3d 46, 860 N.E.2d 519, 307 Ill.Dec. 865 (2nd Dist. 2006), rev’d, —N.E.2d —, 2007 WL 4200819 (Ill.).

28 Id. at 51, 523-524, 869-870.

29 Id. at 52-53, 524-525, 870-871, (Wolfson, P.J., dissenting).

30 In re Marriage of Miller, —N.E.2d —, 2007 WL 4200819 (Ill.) citing State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).

31 In re Marriage of Miller, —N.E.2d —, 2007 WL 4200819 (Ill.).

32 Id.

33 Id.

34 Id.

35 Id.

36 Id.

37 Id.

38 See 750 ILL. COMP. STAT. 28/35(a) (West 2007).

39 Thomas v. Diener, 351 Ill.App.3d 645, 814 N.E.2d 187, 286 Ill.Dec. 537 (4th Dist. 2004).

40 Id. at 647-648, 189-190, 539-540.

41 Id.

42 Id.

43 Id.

44 Id.

45 Id.

46 Id.

47 Id.

48 Id. at 650, 192, 541.

49 Id. at 656, 196, 546.

50 Id.

51 See 750 ILL. COMP. STAT. 28/35(c) (West 2007).

52 Id.; but see Crank v. Crank, 374 Ill.App.3d 1115, 871 N.E.2d 962, 313 Ill.Dec. 235, (3rd Dist. 2007).

53 See 750 ILL. COMP. STAT. 28/60(a) (West 2007); See also Giles v. General Motors Corporation, 344 Ill.App.3d 1191, 802 N.E. 2d 858, 280 Ill.Dec. 607 (5th Dist. 2003).

54 See e.g. Giles v. General Motors Corporation, 344 Ill.App.3d 1191, 802 N.E. 2d 858, 280 Ill.Dec. 607 (5th Dist. 2003).

55 319 Ill.App.3d 567, 745 N.E.2d 687, 253 Ill.Dec. 564 (3rd Dist. 2001).

Henry Kass attended the University of the Basque Country in San Sebastian, Spain and obtained a Bachelor of Arts in Language and Linguistics from the University of Iowa in 1997. Thereafter, he received his Juris Doctorate from the University of Iowa College of Law in 2000 and is licensed to practice both in the State of Iowa and Illinois. Mr. Kass is a member of the Iowa and Illinois State Bar Associations and is actively involved in the DuPage County Bar Association where he serves as the Vice-Chair for the Child Advocacy Committee.


 
 
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