When Workers’ Compensation Claims and Child Support Orders Meet: Can Texas Employers Ignore?

Texas employers and insurance carriers who write in Texas are often confronted with child support orders directing them to withhold earnings from an employee’s income. But what happens when that employee is still employed but receiving workers’ compensation benefits instead of wages?

Workers’ compensation payments are not regarded as “income” for purposes of federal income taxes. However, they are regarded as “income” for purposes of calculating an employee’s child support obligations in Texas.

As an employer, it is important not to disregard such an order. If an employee is receiving workers’ compensation benefits and not receiving wages, unless the employer is self-insured, the employer must send a copy of the order to the workers compensation insurance carrier with whom the claim has been filed. If the employee is not expected to be returning to work, the employer must notify the court and obligee of the termination of employment within seven days and provide the employee’s last known address, and the name and address of the new employer, if known. [TFC §158.206 and §158.213]. If the employee returns to work after receiving income benefits for lost time, the employer should resume income withholding according to the order.

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