Courts and administrative agencies may order the deduction of money from an employee’s income for payment of child or spousal support. Income is defined as any periodic form of payment, and includes wages, salaries, commissions, bonuses, disability benefits, retirement or pension payments, interest from principle, and workers’ compensation benefits.
Virginia employers must honor an income withholding order or notice for child or spousal support from all states and U.S. territories. Employers must deduct the specified amount during each pay period and send it to the appropriate State Disbursement Unit (SDU). The SDU then forwards the payment to the custodial parent or spouse.
When an injured employee is receiving workers’ compensation benefits pursuant to the Virginia Workers’ Compensation Act (VWCA), the insurance carrier stands in the shoes of the employer for purposes of honoring withholding orders. The insurance carrier may, and in some cases, must garnish benefits if the employer has a valid withholding order for child or spousal support. Benefits paid pursuant to the Longshore and Harbor Workers’ Compensation Act, however, are not subject to garnishment.
The withholding order provides how much to garnish from income; however, pursuant toVirginia law, not more than 55% of the workers’ weekly benefits may be withheld. When a workers’ compensation claim is settled, if there is an existing child or spousal support order, withholding can be made for any amount of arrearage up to 55% of the settlement proceeds.
Therefore, it is very important to remember to advise your workers’ compensation insurance carrier, or the attorney retained to represent your interests in defense of a workers’ compensation claim, of any withholding orders or notices for an injured worker who is receiving or seeking to receive workers compensation benefits. The insurance company is then able to withhold the appropriate amount from benefit checks and send it to the SDU for payment to the custodial parent or spouse.