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Child Support and the “Gig Economy”

Child Support and the “Gig Economy”

By: M. Scott Gordon

Has the rise of the “gig economy” changed the way that child support is paid and collected? When we refer to the “gig economy,” we are talking about what the U.S. Bureau of Labor Statistics (BLS) describes as a workforce made up of people in a wide variety of fields who operate on short-term contracts, as freelancers, and in general as independent contractors who earn money going from job to job, and who often are “juggling multiple jobs at once” to put together an average monthly or yearly income. According to an article in Governing.com, “the rise of the gig economy and a broad shift to contract work is making it easier for people to evade child support, causing headaches for parents and for state officials charged with tracking down money.”

In other words, it may be more difficult to hold parents responsible for child support payments when they are not salaried employees and/or do not have steady wage jobs. What do you need to know about the gig workforce and child support accountability?

High Percentage of Child Support is Withheld from Paychecks

According to the article, approximately 70 percent of child support payments are provided through withholding income from the parents’ paychecks. To be clear, a high percentage of child support results from an employer taking the necessary steps to provide information about workers that can allow the state to withhold child support from those workers’ paychecks. If the state does not know about a person’s source of income, it can be extremely difficult to take child support payments directly from a parent’s paycheck. The gig workforce makes this even more complicated.

To be sure, “employers are required to report new hires to a child support database used to find out where parents are working to set orders and withhold income,” in most often “employers are bound by those rules only when they hire full-time or part-time employees, not contractors or gig workers, who are sometimes classified as contractors.” Generally speaking, this holds true in Illinois.

Employer Reporting Requirements for New Hires in Illinois

According to Illinois Child Support Services, employers must report all newly hired employees within 20 calendar days from each employee’s start date to ensure that those employees are accountable for child support obligations. More precisely, employers must report the following types of workers:

  • Full-time employees;
  • Part-time employees;
  • Temporary employees; and
  • Employees who return to work even though they have been off the payroll for 60 days for a number of reasons, from layoffs to medical leaves.

Who is not included? An Illinois Child Support Services FAQ page clarifies that “the rule of thumb is that employers must report all new employees who are required to fill out federal W-4 wage withholding forms,” and that does not include independent contractors who typically are part of the gig workforce. Thus, it may be difficult to withhold income from the paychecks of independent contractors who are responsible for child support payments in Chicago.

Speak with a Chicago Child Support Lawyer

Do you have questions about child support and a parent’s employment status? An experienced child support attorney in Chicago can speak with you about your options. Contact M. Scott Gordon & Associates today.