Colorado Child Support Collections and Fees
Both the noncustodial parent and their employer are bound by an order for Colorado child support collection once it is served. Colorado wage garnishment law requires the employer to follow strict guidelines for withholding and remitting payment. When the employee stops working for the employer, the employer should immediately contact the Colorado Office of Child Support. By notifying the agency, the employer relieves itself of the responsibility of enforcing the order. This administrative step is very important, as the penalties on employers for non-enforcement of child support collections in Colorado are heavy.
Income Subject to Withholding for Child Support Garnishment
Any type of wages or income is subject to child support collections, and Colorado defines wages in a very broad manner. Wages in Colorado include actual gross income, meaning any compensation paid or payable for personal services. Gross income can take the form of earnings from an employer, payment from an independent contractor, commissions, or salaries. Wages also include tips, bonuses, severance pay, retirement benefits, disability benefits, workers’ compensation benefits, dividends, royalties, trust account distributions, moneys drawn for personal use by a self-employed person, insurance benefits (when they replace income), monetary gifts or prizes, taxable distributions from partnership or limited liability companies, distributions from corporations, interest, trust income, annuities, tax refunds, capital gains, lump-sum award or settlement, and rents. However, some of the noncustodial parent’s wages are protected by maximum garnishment limits, as determined by the Consumer Credit Protection Act (CCPA).
Bonuses and Other Lump Sum Payments
When an employer owes a lump-sum payment to an employee subject to a support order, no formal process exists for reporting the payment to the state. However, the state of Colorado requires that the employer contact the agency before making the lump-sum payment to the employee to find out if the employee owes arrearages. If the employee owes arrearages, the disposable earnings of the lump-sum payment may be garnished up to 50%. To determine disposable earnings, all legally required deductions must be made first.
Termination of Employment
If an employee subject to an order for support stops working for the employer for any reason, the employer must contact the agency about this change within ten days of the date of termination. The employer must send the agency a copy of the order with the company name, the employee name and address, the date of termination, and the new employer’s name and address, if known. If the employee retired and will be receiving another source of income such as a pension, the employer must provide the name and address of the administrator of that income to the agency. If the employer rehires the employee while the support order is still in effect, the employer must immediately continue withholding.
An employer may charge a maximum of $5 per month for the fees associated with enforcing and administering a support order. However, these fees must come out of the employee’s wages, and the total deduction can never exceed the maximum withholding limits.
Penalty for Noncompliance
An employer is bound by law to enforce an order of support on an employee. Failure to do so will lead the court to hold the employer in contempt. Further, the employer will be held liable for any unpaid amount to the agency.
Colorado State Office of Child Support – Contact Information
Division of Child Support Enforcement
1575 Sherman Street, 5th floor
Denver, CO 80203
Phone: (303) 866-4300
Fax: (303) 866-4360