Expiring Child Support Laws Hit California Small Business Employers

August 11, 2006; 07:15 AM

Los Angeles, Ca. - Small business expert and author Joe Kennedy announced today that he is teaming with well known family law attorneys Robert Ackermann and Bernal Ojeda to increase awareness of an expiring law that could adversely affect operations at firms where employees have child support issues.

Under current California law, counties may utilize a wide range of techniques in collecting from fathers who fall behind in court ordered child-support payments. And businesses who have no interest in the personal lives of employees may find themselves in the middle of the problem.

A current issue is Family Code Section 7646(a)(3) which allows an alleged father to request DNA testing to determine if he is indeed the father of a disputed child. If the DNA results are negative, the court may void associated child support obligations. But this right will expire on September 28th and there is no talk of extending or renewing the legislation, according to the two attorneys.

“DNA testing is a just way of relieving accused fathers of these sometimes crushing financial obligations,” said Kennedy. “But now that it’s going away small businesses will be increasingly in the line of fire when counties try to collect.”

There are several reasons for this. First, small business owners may be ordered to garnish the wages of so-called “deadbeat dads” which imposes an administrative headache on accounting staffs, and may expose the firm to financial obligations. For example, if the employer is slow in implementing the garnishment and the employee quits, the employer may well be liable for associated uncollected payments.

Kennedy further notes that many small business employees find that their best move is to quit rather than suffer an effective wage loss of up to 50% when employers follow court orders and garnish wages. Kennedy concluded “As the employee walks out the door, valuable training, experience, contacts and trade secrets are also lost. Since 97% of businesses have 5 or fewer employees, this government-inspired employee turnover can have a crippling effect on the business.”

Additionally, notes Robert Ackerman, the county may yank professional credentials and licenses in their quest to collect. “Medical, dental, engineering, architectural, real-estate, contractor and even drivers licenses may be revoked which effectively stops a business cold in its tracks,” Ackerman remarked.

Bernard Ojeda continued “And this is a problem that is not going away. A recent study* found that child support orders are set too high relative to ability to pay, the state will optimistically collect only 25% of the past due amounts, and the size of the problem is growing at a dramatic rate.** This means that the only solution for many workers is to continually skip from one employer to the next and stay ahead of the garnishment game. This is disruptive to employers, employees and the communities they serve.”

Those affected are encouraged to quickly seek legal advice since the current law expires on September 28 and court papers must be prepared well in advance.

Joe Kennedy and TSBOM Associates provide revenue growth, accounting and investment banking services for small businesses as seen at www.tsbom.com. Joe has an MBA in marketing and a BS in Finance from Penn State and is author of "The Small Business Owner's Manual" (Career Press, 2005, ISBN 1-56414-813-0, www.TheSmallBusinessOwnersManual.com) based upon his 20+ years of experience in serving as owner, director, officer, advisor, vendor and client to businesses all over the U.S. and across many industries.

Robert Ackermann has practiced law in southern California since 1984. He is a graduate of the University Of Denver College Of Law, and received his Masters from New York University School of Law. He primarily represents fathers who have child support problems in counties throughout California.

Bernal Ojeda is a bilingual attorney (Spanish and English) and a 1988 graduate of the LaVerne University College of Law. For more than fifteen years, Mr. Ojeda has practiced in all areas of family law, including child support, child custody and marital dissolution. Mr. Ojeda additionally served as a Judge Pro Tem, and for more than five years also served as a member of the Los Angeles County Family Law Indigent Panel, where he represented many disadvantaged non-custodial parents in child support matters.

* The Urban Institute, “Examining Child Support Arrears in California: The Collectibility Study,” (March 2003, www.childsup.cahwnet.gov/pub/reports/2003/2003-05collectibility.pdf), p. 9.
** ibid, page 1.