Employers in the State of Illinois must become more aware of their obligations arising under the Income Withholding for Support Act (750 ILCS 28/1 et seq.). This Act provides the authority for a court of law to designate that periodic payments of funds for the support of a child or a maintenance of the spouse can be collected from the Employer of the individual having an obligation to make those payments. It is the obligation of any Employer to deduct from the "income" of any individual the required court-ordered periodic payments from that individual's income. The term "income" is defined as "wages, salary, commission, compensation as an independent contractor, worker's compensation, disability payments, annuity payments, pension payments and retirement benefits, lottery prize awards, insurance proceeds, vacation pay, bonuses, profit-sharing payments, severance payments, and any other payment" (750 ILCS 28/15 § D). Obviously, the breadth of income is extremely broad and certainly would cover "any and all" monies paid by an Employer to an employee!
If served with a Support Payment Court Order, it is the obligation of an Employer to deduct within fourteen (14) calendar days following the date on which the Notice Designating Withdrawal is mailed and to forward any amounts so withdrawn to the State Disbursement Unit which is identified on the Court Order within seven (7) business days of the deduction. Failure to make the payment within the seven (7) business days could expose the Employer to a fine of $100 per day for failure to submit the payments before the expiration of the seven (7) business days after deduction (750 ILCS 28/35). It also should be noted that any officer or employee of an Employer who has the control, supervision, or responsibility for withholding and paying over income pursuant to the Notice and who fails to do so may be personally liable for failure to make such deduction and/or pay such deduction to the State Disbursement Unit.
There have been a number of cases in which Employers have found themselves subject of extensive penalties (In Re: Marriage of Miller, 227 Ill.2d 185 (2007) - a penalty of $1,172,100.00 and In Re: Marriage of Gulla, 282 Ill.App.3d 498 (2008) - a penalty of $369,000.00). Both of these cases occurred before the statute was modified in 2012 to require that written notice be given to the Employer of its failure to deduct and/or mail payments timely before the $100.00 per day fine may be imposed.
Regardless of the need for "written notice," this is not an area for Illinois Employers to become lax or cavalier. Please make certain that any Income Supporting Act Notices are dealt with expeditiously and correctly.
Questions? Contact Walter J. Liszka in the Chicago office at [email protected] or by phone at (312) 629-9300.