Having an involuntary wage deduction attached to your earnings is right up there with nose warts, floods and traffic jams on a hot summer’s day—there is nothing you can do except get through it! The wart will eventually melt, the flood waters recede and traffic lets up. Not so with the involuntary wage deduction. Unfortunately, when such an order comes to us, the Fund is unalterably and legally bound to honor it.

We realize, however, that many of you may be unaware of the process and, to that end, we’d like to introduce you to the A-B-C’s of the involuntary wage deduction procedure from its inception to conclusion.

Webster-like Definition of the Involuntary Wage Deduction:

It is a non-negotiable demand by judicially supported entities to withhold a set amount of earnings from someone who is under financial obligation to satisfy such demands.

A mouthful! Now, in layman’s terms, these are the five most common types of withholding orders which result in involuntary deductions against your distribution check: tax levies, child support withholding orders, creditor garnishments, bankruptcy orders and student loan collections.

You’ll Know Them When You See Them As:

• Tax Levies – IRS form 668-W, known as “Notice of Levy on Wages, Salary and Other Income.”
  
• Child Support Withholding Orders – generated by a county or state.
  
• Creditor Garnishments – sometimes called Wage Attachments or Income Execution.
  
• Bankruptcy Orders – issued as a result of court orders.
  
• Student Loan Collections – derived from non-payment of Federal or state financial aid debt.
  

When An Order Takes Effect

Once an order is received by the Fund, it will go into effect no later than the first payment period beginning 14 working days following the mailing of the Notice to Withhold to the employer. Some states may require that order to take effect sooner.

Priority of Withholding Orders

The Big Kahuna of garnishments comes in a small package—child support! Orders to withhold wages for child support take priority over all the other garnishments or attachments issued against the participant’s earnings. The only exception to that would be IRS tax levies. And the Number One spot goes to IRS tax levies only if the order is received before the child support court orders (Special note: if child support is ordered, it will be an amount to satisfy child support obligations). Under recent amendments to the Federal Bankruptcy Code, child support debts are nondischargeable. This means that they will not go away, disappear or vanish until satisfied, paid up, and zeroed.

The Deduction

The following breakdown illustrates how your check stub would look without an earnings withholding order and under the assumption that you fall in the 20% tax bracket:

On the flip side, if an earnings withholding order lands in our mailbox, using the same 20% tax bracket and 50% IRS withholding, your distribution check would read like this:

And here’s why: All earnings withholding orders are calculated from the participant’s net disposable income after all applicable taxes have already been withheld.

Nothing Lasts Forever, However. . .

The Fund must continue to withhold until we receive a written release from the court or agency involved. We’re sure you wouldn’t like to have this scenario continue to play after you’ve paid! Make sure that doesn’t happen. We strongly encourage participants who have satisfied their garnishment/levy liability to check with us to determine whether or not we have received a Released/Withdrawn Notice from the originating agency.

This should be done no later than April in case the agency has not notified us. You will need the time advantage to contact the pertinent agency and have them send the written release to us prior to the Fund’s regular July lst disbursement. As hard as we work to assist you in every way we can, in this particular instance the Fund is not required to call the agency on your behalf; in fact, the issuing agency of the withholding order will rarely entertain a third-party inquiry regarding the taxpayer/participant’s account.

When a Refund Comes Along

In the event, and this could happen, a participant becomes due a refund because the notice of Withdrawal/Termination order did not reach the Fund’s office in time prior to processing the distribution payment checks, here’s what to do: the taxpayer/participant must contact the issuing agency to apply for a refund. Should the agency return the payment to the Fund, we will, of course, refund the same amount back to the participant involved. To avoid this type of occurrence, the participant should contact the Fund no later than April to make sure we have received the Withdrawal/Termination order. If that hasn’t happened, follow-up with the Agency—employ a sense of urgency sprinkled with emotion.

Helpful Tip

Making inquiries to these various agencies can be a trifle intimidating when one is beset with a plethora of telephone menus or a live representative you finally locate who doesn’t understand how to help you because you’ve given information that was a bit off the mark. Here’s the focus: When making inquiries to an agency, ask them to check employer remittances from either the names:

“Theatrical and Television Motion Picture Special Payments Fund” as well as our current DBA name: “Film Musicians Secondary Markets Fund”

That about sums it up from our end. Involuntary Deductions’ territory can be filled with inscrutable and confusing legalese. Do give us a call if you’re at all uncertain about any of the aforementioned information. Our staff is always on the ready to help you wade through any Earnings Withholding Orders that may happen to you as life unfolds, oftentimes along unpredictable, muddled pathways.

However, what we have offered regarding involuntary wage deductions is not intended as legal advice for an individual situation. If you need assistance other than what our staff is able to provide, please contact your State Labor Department or an attorney.