Failure to Obey Income Withholding for Support Order Can Be Expensive

 Posted on June 09, 2016 in DuPage County Business Law Attorney

When a person thinks of all the legal issues that a business owner may have to deal with, the last thing that probably comes to mind is child support. After all, child support falls under the bailiwick of family law, not business law. However, as one Illinois business recently found out, not abiding by all the rules that the state of Illinois has in place can be costly—to the tune of $2.3 million.

The business, located in Cook County, is a car dealership. Its former finance manager was ordered to pay child support for children he and his ex-wife had together. The funds for that support were supposed to be deducted from the father's paycheck, however, the dealership did not follow those court orders and the money was never withheld.

By 2010, the amount owed to the mother was over $7,000, so she therefore filed a lawsuit against the dealership and the business was ordered to pay her the full amount.

However, another provision under the Illinois child support law is that a business can be penalized for refusing or failing to withhold funds via a statutory notice. The fine is $100 per day. Even more costly is the amount owed can also be compounded.

The judge found that the company had deliberately refused to comply with the order and awarded the dealership to pay the mother $2,263,500.00. There is a separate hearing, to be held in July, where the mother is also requesting the business be responsible for her attorney fees—currently at $861,000.

There are several businesses in Illinois which have been found financially liable for back support and the daily penalty, often in the tens to hundreds of thousands of dollars. Until this current case, the largest amount awarded to plaintiff was $1.2 million in penalties.

State and federal laws are stringent when it comes to an employer's responsibility for income withholding of an employee who is ordered to pay child support. Whenever a company receives an Income Withholding for Support Form (IWO), no matter what state it is received from, it is under a legal obligation to comply. As the car dealership learned in the recent case, failure to do so can be costly.

If you are a business owner and have legal questions or concerns regarding your company, please contact an experienced DuPage County business law attorney. Call Stock, Carlson & Asso. LLC at 630-665-2500 today.

Sources:

http://www.daily-journal.com/news/local/m-judgment-may-be-largest-ever/article_a5cfdb1b-204c-589a-8090-bc08ef162e7a.html

http://www.illinoiscourts.gov/opinions/appellatecourt/2004/2nddistrict/december/html/2030824.htm

http://www.illinoiscourts.gov/opinions/appellatecourt/2004/4thdistrict/august/html/4030750.htm

http://www.acf.hhs.gov/programs/css/resource/processing-an-income-withholding-order-or-notice