Court-Ordered Debt (COD) - Earnings Withholding Order for Court-Ordered Debt (Employer Information)

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Definition of an Earnings Withholding Order

An Earnings Withholding Order is a wage garnishment that continually seizes a percentage of a debtor's earnings until we release the order. We issue an Earnings Withholding Order for debtors who owe a delinquent court-ordered debt (Revenue and Taxation Code Section 19280, and California Code of Civil Procedure Section 706.074).

Employer's responsibilities

When you receive our Earnings Withholding Order, you must:

  • Deliver all pages of the order labeled EMPLOYEE'S COPY to your employee within 10 days of receipt.
  • Complete and return the Employer's Acknowledgement, PAGE 2A (and PAGE 2B if applicable) to us within 15 days of receipt.
  • Include a copy of PAGE 1A with every payment.
  • Send us the first payment at the end of the next pay period that occurs at least 15 days after you receive our order.
  • Keep sending us payments until the balance is paid, or until we release this legal order. Send us these subsequent payments within 10 days of each pay period's end date. Or send us a combined payment for each month's pay period(s) within 15 days of the end of each month.
  • Note: If your employee does not meet the withholding criteria, you still must complete Employer's Acknowledgement, PAGE 2A and send it to us.

You must perform these actions to comply with our legal order. It is illegal not to comply, and we may hold you personally responsible for the debt if you do not comply. You also cannot avoid making payments by postponing or advancing your employee's wages.

Because you are legally required to comply with the terms of our order, you are not liable to your employee for sending us the payments and information requested. However, if we refund any of these payments to you, then you must provide these funds to the employee. In such cases, you are fully liable for the employee's funds refunded to you.

How to process an Earnings Withholding Order

Step 1 - Determine your employee's gross earnings.

  • Calculate your employee's gross earnings, which include bonuses and commissions.

Step 2 - Then subtract the lawful deductions below from gross earnings:

  • Federal income tax.
  • Social security.
  • State income tax.
  • State disability.

Important: Do not subtract any of the following from gross earnings:

  • 401(k) contributions.
  • Health benefit deductions.
  • Court-ordered assignments for support (for example: child support, spousal support).
  • Voluntary deductions.

Determine your employee’s disposable earnings.

Step 3 - Find the withholding amount on the chart below or use our withholding calculator to determine the withholding amount.

If your pay period is: And your employee's
disposable earnings are:
Withhold and send this amount.
Use the instructions on PAGE 1A in box 5.
Weekly $0 - $217.50 None
$217.51 - $290.00 Amount above $217.50
$290.01 or more 25 percent of the disposable earnings
Every Two Weeks
(Biweekly)
$0 - $435.00 None
$435.01 - $580.00 Amount above $435.00
$580.01 or more 25 percent of the disposable earnings
Twice a Month
(Semiweekly)
$0 - $471.25 None
$471.26 - $628.28 Amount above $471.25
$628.29 or more 25 percent of the disposable earnings
Monthly $0 - $942.50 None
$942.51 - $1,256.00 Amount above $942.50
$1,256.01 or more 25 percent of the disposable earnings

Note: Applicable interest, penalties, and fees will accrue on the debtor's account until the entire debt balance is paid. As a result, we may issue another order to collect any accrued debt.

Step 4 - Send the information and payments noted below.

Information to send:

  1. Deliver Employee's Copy PAGES 1A, 1B, 3A, and Page 3B (and PAGE 4 if applicable) to the employee within 10 days of receipt.
  2. Complete and return the Employer's Acknowledgement, PAGE 2A (and PAGE 2B if applicable) to us within 15 days of receipt.

Payment instructions:

  1. Make your check or money order payable to Court-Ordered Debt Collections.
  2. Write your employee's name, account number (as shown on this order), and billing number on each payment.
  3. Include the date you withheld the funds and a copy of Employer's Copy PAGE 1A with every payment.
  4. Send us the first payment at the end of the next pay period that occurs at least 15 days after you receive our order.
  5. Keep sending us payments until the balance is paid, or until we release this legal order. Send us these subsequent payments within 10 days of each pay period's end date. Or send us a combined payment for each month's pay period(s) within 15 days of the end of each month.
  6. Do not write your employee's social security number on the payment envelope.

Address for EWO payment and requested information

Send us the items listed above in the enclosed return envelope.

If you do not have a return envelope, please send the items to:

Court-Ordered Debt Collections
Franchise Tax Board
PO Box 1328
Rancho Cordova, CA 95741-1328

Employer reimbursement for processing our order

You can deduct $1.50 from your employee's pay for each payment you make under our Earnings Withholding Order (California Code of Civil Procedure Section 706.034).

Frequently asked questions

  1. My employee says withholding for this order will create a hardship. Can our payroll adjust the deduction?
  2. My employee has another levy in place. What should I do with the order you sent to me?
  3. Should I call the Franchise Tax Board when I receive an order?
  4. The employee no longer works for the company. What should I do with the order?
  5. The employee is on leave of absence, workers' compensation, or disability. What should I do?
  6. The social security number on your order does not match the number I have for the employee. What should I do?
  7. The name of my employee does not match the name on your order. However, the social security number is the same. What should I do?
  8. I have no record of the employee. What should I do?
  9. I have been sending payments to you for an Earnings Withholding Order. Now I received a new Earnings Withhold Order from you. What should I do?
  10. I received multiple earnings withholding orders for different employees. Can I send one check?
  11. My employee told me that other arrangements have been made with the Franchise Tax Board. What should I do?
  12. My employee filed bankruptcy, brought me the court documents, and told me to stop sending payments to you. What should I do?
  13. What is a Modification of a Withholding Order?
  14. How do I process a Modification of a Withholding Order?
  15. How can I contact you for help processing an Earnings Withholding Order?
  16. I have been sending payments to you for an Earnings Withholding Order. Now I received a new Earnings Withholding Order from a different agency. What should I do?

  1. My employee says withholding for this order will create a hardship. Can our payroll adjust the deduction?

    No. Only we can reduce the amount withheld on an order. We will adjust the deduction if we determine a hardship exists. Provide your employee with your payroll fax number, and our telephone number, 916.845.4064.

    If we adjust the order, we will send you a Modification of a Withholding Order.

  2. My employee has another levy in place. What should I do with the order you sent to me?

    If the existing levy is from ... Then ...
    A state agency, and is for a liability other than taxes (such as Department of Motor Vehicles fees). Pay our order. Our order has priority and the non-tax levy is put on hold until our order is paid in full or released.
    A civil judgment (such as small claims court). Pay our order. Our order has priority and the non-tax levy is put on hold until our order is paid in full or released.
    A court-ordered levy of wages for child or spousal support that is less than 25 percent of your employee's disposable earnings. Pay us the remaining amount not to exceed 25 percent of your employee's disposable earnings. For example, if the child or spousal support order takes 13 percent of disposable earnings, send us an amount not to exceed 12 percent of disposable earnings.
    A court-ordered levy of wages for child or spousal support that is equal to 25 percent of your employee's disposable earnings. Do not pay our order. A child or spousal support order that takes 25 percent of disposable earnings has priority over our order. Put our order on hold until the child or spousal support order is paid or released.
    The Internal Revenue Service (IRS) levy of wages for taxes that is less than 25 percent of your employee's disposable earnings. Pay us the remaining amount not to exceed 25 percent of your employee's disposable earnings. For example, if the IRS garnishment takes 13 percent of disposable earnings, send us an amount not to exceed 12 percent of disposable earnings.
    The Internal Revenue Service (IRS) levy of wages for taxes that is equal to 25 percent of your employee's disposable earnings. Do not pay our order. The IRS levy takes 25 percent of disposable earnings, and has priority over our order. Put our order on hold until the IRS levy is paid or released.
    Another state taxing agency (such as the Employment Development Department or the Board of Equalization). Do not pay our order. Please complete PAGE 2A (and PAGE 2B is applicable) of our order, and return it to us within 15 days of the date you received it.
  3. Should I call the Franchise Tax Board when I receive an order?

    No. Complete PAGE 2A (and PAGE 2B if applicable) of the order and return it to us using the envelope provided with the order.

  4. The employee no longer works for the company. What should I do with the order?

    If the employee no longer works for you, but left within the past 12 months, complete PAGE 2A of the order and return it to us using the envelope provided with the order.

    If the employee is expected to return to work within 12 months of the date of termination, you must withhold wages as directed on PAGE 1 when the employee returns to work.

  5. The employee is on leave of absence, workers' compensation, or disability. What should I do?

    The order remains in effect even if there are no earnings. Complete PAGE 2A of the order and begin withholding when the employee returns to work.

  6. The social security number on your order does not match the number I have for the employee. What should I do?

    Please call us at 916.845.4064. We will analyze the account.

  7. The name of my employee does not match the name on your order. However, the social security number is the same. What should I do?

    Please call us at 916.845.4064. We will analyze the account.

  8. I have no record of the employee. What should I do?

    Complete PAGE 2A of the order; indicate that you have no record of the employee; then return it to us using the envelope provided with the order.

  9. I have been sending payments to you for an Earnings Withholding Order. Now I received a new Earnings Withholding Order from you. What should I do?

    Please call us at 916.845.4064. We will analyze the account.

  10. I received multiple earnings withholding orders for different employees. Can I send one check?

    Yes. On your check you must identify the employees' names, account numbers (as shown on each order), billing numbers, and the amounts withheld for each employee. Failure to provide all the information requested may result in a delay of crediting a payment and/or misapplying a payment.

  11. My employee told me that other arrangements have been made with the Franchise Tax Board. What should I do?

    You must make payments to us as directed by our order. We will notify you if we modify or release our Earnings Withholding Order.

  12. My employee filed bankruptcy, brought me the court documents, and told me to stop sending payments to you. What should I do?

    Please call us at 916.845.4064. We may need the employee to provide us with the bankruptcy documentation before we make a final determination.

  13. What is a Modification of a Withholding Order?

    A Modification of a Withholding Order is a change to the original terms of the Earnings Withholding Order. We issue a Modification of a Withholding Order because:

    • There may have been changes to the payment terms from the original Earnings Withholding Order.
    • The levy amount may have caused undue hardship.

    A Modification of a Withholding Order takes precedence over the original Earnings Withholding Order. You are legally required to honor a Modification of a Withholding Order.

  14. How do I process a Modification of Withholding Order?

    Give PAGE 2 of the Modification of a Withholding Order to your employee and keep PAGE 1 for your records. The item modified (i.e., total debt amount, payment amount, or date to begin sending payments) is listed in the middle section of PAGE 1. The payment instructions are at the bottom of PAGE 1. When sending us payments, please include a copy of the Modification of a Withholding Order with each payment.

  15. How can I contact you for help processing an Earnings Withholding Order?

    Call us at 916.845.4064 Monday through Friday between 8 a.m. and 5 p.m. except on state holidays.

  16. I have been sending payments to you for an Earnings Withholding Order. Now I received a new Earnings Withholding Order from a different agency. What should I do?

    Unless the new Earnings Withholding Order is for child or spousal support, continue to honor our Earnings Withholding Order until it is paid in full or released.

Earnings Withholding Order Glossary of Terms

Disposable earnings:
Your employee's total earnings minus lawful deductions.

Lawful deductions include:

  • Federal income tax.
  • Social security.
  • State income tax.
  • State disability.

Deductions that cannot be subtracted from disposable earning totals are:

  • 401(k) contributions.
  • Health benefit deductions.
  • Court-ordered deductions for child or spousal support.
  • Voluntary deductions.

To calculate disposable earnings, subtract the lawful deductions from gross earnings.

Gross Earnings:
Wages, salary, commissions, bonuses, vacation pay, or anything you pay your employee for personal services.
Levy:
A legal court order that compels a third party to withhold part of an individual's wages to satisfy a debt. (A levy is also referred to as a wage garnishment or a wage assignment.)
Release:
A legal order that terminates a wage garnishment, releasing an employer from complying with our current Earnings Withholding Order.
Withholding amount:
The amount you must withhold from your employee's disposable earnings and send to us.