• Gig Economies Find Loopholes for Child Support
  • January 24, 2018
  • When couples with children divorce, child support orders ensure that the children’s basic needs are paid for by both parents. About 70 percent of the time, child support is collected by withholding income from paychecks. The rise of the gig economy, where people earn their income through multiple jobs, is making it harder to collect child support this way.

    Every employer must enter the information of new hires into a child support database that tracks who is under orders and how much income needs to be withheld. However, in most states, the rule applies only to full-time and part-time workers. Contractors and gig workers fall outside the requirement and only certain states have expanded the law to include them in reporting obligation. Although the state of California requires employers to report contractors, Uber and Lyft have not complied, leaving officials with few options.

    Masking Income
    Laura Morgan, author of the book, Child Support Guidelines, says that traditionally it was always easier for self-employed people to mask their true income. She sees contractors in the gig economy as a natural extension of this tactic. According to a study by researchers at Harvard and Princeton from 2005 to 2015, the percentage of contractors or freelancers in the U.S. increased from 10.1 percent to 15.8 percent. It is estimated that one percent of the U.S. adult population participates in the on-demand platform economy every month.

    With this amount of growth in the freelance sector, more time and effort will be given to tracking down who is earning what with regard to making sure child support gets paid. Attorneys seeking unreported income will look at parents’ lifestyle and purchases, tax returns, and activity in bank accounts. Social media can also provide clues when people post pictures of their vacation or a new car.

    Challenges to Tracking Income
    Even in the states that require employers to report their employees who are contractors to state databases, it is difficult to enforce the rules for child support. Many gig jobs are not long term. By the time officials get word of an employee that should be paying child support, they are not employed at the same location. State rules apply only if the contractor’s wages reach a certain threshold.

    Additionally, companies function as partners in helping collect child support, so it is hard to punish them when they do not comply with the rules. States have few sanctions available to levy as enforcement. Across the country, unpaid child support is estimated at $114 billion, a number that grows every year. Children are the ones who suffer when custodial parents who do not receive child support payments are left struggling to provide for the child’s present and future needs.

    Towson Child Support Lawyers at Huesman, Jones & Miles, LLC Assist Clients with All Matters Related to Child Support and Custody
    Whether you are preparing your child support case, modifying, or enforcing child support agreements, the experienced Towson child support lawyers at Huesman, Jones & Miles, LLC can help you obtain a favorable outcome. We work with the best interests of both parents and their children in mind. Call 443-589-0150 today to schedule a free and confidential consultation, or contact us online. We have offices in Hunt Valley and Towson, Maryland, assisting those in Baltimore County, Carroll County, Harford County, and Howard County.