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Vehicle Registration Collections - Earnings Withholding Order (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. We issue an Earnings Withholding Order for debtors who owe delinquent vehicle registration fees (Revenue and Taxation Code Section 10878).

Employer's responsibilities

When you receive our Earnings Withholding Order, you must:

  • Within 10 days from the date you receive it, give the employee Page 3 of the order.
  • By the first pay period that ends 15 days after you receive our order, complete Page 2 of the order, and return it to us with the payment (if applicable).
  • Continue sending us payments until the amount on our order is paid or we send you a release.

It is illegal to keep money that you withhold from your employee for our Earnings Withholding Orders. We may hold you personally liable if you do not comply with this order, or if you illegally keep the money withheld.

It is illegal for you to avoid an Earnings Withholding Order by postponing or advancing payment of earnings.

You must not change your employee's pay period to prevent an order from taking effect.

You are not liable to your employee for money sent to us as required by our Earnings Withholding Order.

Exception: If we refund withheld employee funds back to you, you are responsible for returning those funds to the employee.

How to process an Earnings Withholding Order

Step 1 - Determine the disposable earnings.

  • From your employee's gross earnings, including bonuses and commissions, subtract the following lawful deductions:
    • Federal income tax
    • Social security
    • State income tax
    • State disability

    Important: Do not subtract the following items from gross earnings:

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

Step 2 -Once you determine the disposable earnings, use the chart to find the withholding amount for the pay period:

If your pay periods are 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% 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% of the disposable earnings
Twice a Month
(Semimonthly)
$0 - $471.25 None
$471.26 - $628.28 Amount above $471.25
$628.29 or more 25% of the disposable earnings
Monthly $0 - $942.50 None
$942.51 - $1,256.00 Amount above $942.50
$1,256.01 or more 25% of the disposable earnings

Note: Do not withhold more than 25 percent of the employee's disposable earnings.

Step 3 - By the first pay period ending 15 days after you receive our order, you must send us the items listed under first payment instructions.

Exception: If your employee does not meet the criteria for withholding, then complete Part 2 and mail it to the address under first payment instructions.

For future payments, please refer to future payment instructions.

First payment instructions

Send us the following items in the enclosed return envelope:

  • A check or money order payable to Vehicle Registration Collections for the amount withheld.
    • Write your employee's full name, account number, and billing number on the front of your payment. The billing number can be found on the order.
    • Include the date you withheld the funds.
  • Page 2 of our order with all requested information (if known).
  • A copy of Page 1 of our order.

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

VEHICLE REGISTRATION COLLECTIONS
FRANCHISE TAX BOARD
PO BOX 419001
RANCHO CORDOVA CA 95741-9001

Future Payment Instructions

  • Send future payments to us no later than the 15th of each month.
  • Include the employee and billing information listed under first payment instructions with your check or money order payable to Vehicle Registration Collections.
  • Include a copy of Page 1 of the order with all future payments.

Important: Keep a record of the payments you send us until the amount due is paid, or until we release the Earnings Withholding Order.

Parts of an Earnings Withholding Order

Page What is it? What to do with it
1 Employer’s Copy Keep the original for your records. Include a copy of it with each payment you send.
2 Employer’s Copy (Acknowledgement) Complete and send this copy back to us.
3 Debtor’s Copy of the Order Give this to your employee.
3a Notice of Debtor’s Rights Give this to your employee.

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 earning withholding orders for more than one employee. 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 Withholding Order?
  14. How do I process a Modification of Withholding Order?
  15. How can I contact you for help processing an Earnings Withholding Order?

  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, 916.845.6872.

    If we adjust the order, we will send you a Modification of 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 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. For example, if a court-ordered garnishment takes 13 percent of disposable earnings, send us 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 court-ordered levy that takes 25 percent of disposable earnings has priority over our order. Put our order on hold until the court ordered levy 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. For example, if the IRS garnishment takes 13 percent of disposable earnings, send us 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 that takes 25 percent of disposable earnings has priority over our order. Put our order on hold until the court ordered levy is paid or released.
    Another state taxing agency, and is for a liability other than taxes (such as the Employment Development Department or the Board of Equalization). Do not pay our order. Please complete Part 2 of our order and return it to us within 15 days of the date you received it.
    A state agency, and is for a liability other than taxes (such as department of Motor Vehicles fees). Do not pay our order. An order for Department of Motor Vehicle fees 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). Our order has priority. Put the civil judgment on hold until our order is paid or released.

  3. Should I call the Franchise Tax Board when I receive an order?

    No. Complete Part 2 of the order and return it to us with the payment (if applicable) 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 Part 2 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 Part 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 Part 2 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 916.845.6872. 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 916.845.6872. We will analyze the account.

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

    Complete Part 2 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 916.845.6872. We will analyze the account.

  10. I received earning withholding orders for more than one employee. Can I send one check?

    You can send one check for all of your employees if:

    • Each Earnings Withholding Order is from Vehicle Registration Collections.
    • For each employee you list the full name, social security number, account number, billing number, and the amount withheld.
  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 916.845.6872. We may need the employee to provide us with the bankruptcy documentation before we make a final determination.

  13. What is a Modification of Withholding Order?

    A Modification of Withholding Order changes the requirements of an Earnings Withholding Order. We send it to reduce debt, reduce the percentage of wages garnished, or to delay the payments scheduled to be sent to us. You are legally required to honor a Modification of Withholding Order.

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

    Give Page 2 of the Modification of 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 Withholding Order with each payment.

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

    Call us at 916.845.6872 Monday through Friday between 7 a.m. and 5 p.m. except on state holidays.

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 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. This is 25 percent of disposable earnings, unless we reduce the payment amount with a Modification of Withholding Order.