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Child Support Loophole for Gig Economy Workers
Withholding income is the most common method of collecting child support payments following a divorce. To avoid paying child support, individuals may attempt to hide their income. For workers in the gig economy, whereby companies contract with independent workers for short term and temporary positions, it may be much easier to evade child support obligations.
Gig economy workers can include Lyft drivers, Uber drivers, Airbnb renters, Grubhub drivers, couriers, or contract positions. According to an American University study, 2.5 million adults in the United States work in the on-demand platform economy each month. A separate Harvard and Princeton study found that freelance or contract workers consist of 10 percent of the United States workforce.
Companies Fail to Report
Child support agencies are finding that for certain gig economy workers, this type of employment has created the perfect way to evade their child support obligations. Court ordered child support payments resulting from divorce proceedings are meant to ensure that both parents pay for the basic needs of their children, including their housing, food, and clothing. While hiding income to avoid a child support payment is not a new problem, the gig economy has created an easy environment to mask income given the lack of permanency of gig jobs, which often last just weeks or days.
Many companies who hire gig workers may not necessarily comply with state reporting requirements that are designed to assist child support agencies in collecting payments. Most state laws require employers to report new hires to the state’s child support database for their hired full time or part time employees, not gig workers or other types of independent contractors. States like Texas and California require companies to report contactors to their respective child support databases.
Child Support Tracking System Needed
Lawmakers continue to struggle with ways to effectively track parent income. There is approximately $114 billion in unpaid child support nationwide, and that amount is growing each year. As almost 70 percent of child support payments are collected by garnishing paychecks, child support officials are struggling to find new ways to track down the income earned by gig workers. Attorneys hired by parents are using alternative means of determining parent income, including examining tax returns, bank account cash flow, and purchase histories. Clues about parent income from social media sites including Facebook and Instagram is another tool used to determine hidden income sources.
Mendham Child Support Lawyers at Lyons & Associates, P.C. Can Assist Clients in Child Support Issues
If you are owed child support payments, the experienced team of Mendham child support lawyers at Lyons & Associates, P.C. are ready to assist you. We will help you navigate through the divorce process, including the division of marital property, child custody, and alimony issues. With offices conveniently located in Somerville, New Jersey, we proudly serve clients throughout the surrounding areas. Call us today at 908-575-9777 to schedule a free confidential consultation, or contact us online.