Michigan State Disbursement Unit. Employer News

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1 Michigan State Disbursement Unit Employer News All newsletters are downloadable from the MiSDU Website Volume 7, Issue 3 The MiSDU in Review The MiSDU is Committed to having a positive impact on the lives of Michigan Families; always with respect and compassion. Through innovation, teamwork, perseverance and dedication, we serve our partners and community. The MiSDU continually achieves excellence in helping the Government serve the public interest. The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), passed by Congress required States to centralize collections and disbursements of child support payments through State Disbursement Units (SDUs). The primary objectives of centralization was to provide employers with a single location in each State to send income withholding Imaging System High speed mail openers Document Printers Inserters Sealers Equipment Departments Payment Processing ~ Research - CIRU Disbursements ~ Customer Service H R ~ Administration ~ Employer Outreach Quality Assurance ~ Training ~ IT Research ~ Ancillary Services ~ Finance Payment Processing FIDM-Data Match Electronic Document Management Project Management Software Development Project Management and Oversight Consulting Services Application Maintenance and Operations MiSDU Proudly powered by Informatix, Inc. payments, and to make payment processing more efficient and economical. Some of the Federal requirements for States include: Provide employers with a single payment location Disburse payments within 2 business days Process all payments for a specified caseload (with discretion to include all cases) Provide payment information to parents Operate the SDU through a State agency or contractors Staff the SDU sufficiently to perform required functions Automate procedures as much as feasible, efficient, and economical Integrate the SDU with the State s Automated Child Support System Monitor SDU Performance In the beginning The MiSDU, located near Lansing, MI, was established in Staffing for the start up was close to 300 employees to ensure a smooth deployment. Work began right away to utilize the ACH network to receive payments by Electronic Funds Transfer (EFT/EDI). By the end of the first five year contract, approximately 24% of the payments received were electronic. There were 14 Employer Outreach/EFT Specialists who worked with employers tirelessly to Inside this issue The MiSDU in Review Electronic Payment Report Card Employer Resources Cont d next page State of Michigan Withholding

2 Cont d from page 1 complete case reconciliation, correct missing payment identifiers, and to convert paper payments to EFT. Our world today In the early days, the MiSDU received approximately 8,900 transactions per month, with employers responsible for about 80% of the payments through employee income withholdings. Mail delivery started at an early 3:30 am Monday Saturday. MiSDU employed 16 dedicated mail handlers. The scan room housed 2 supervisors, 2 leads, and 7 operators. An additional 6 full time staff performed reconciliation to balance payments and handle returned items. The Payment Processing Department was staffed with 3 full time supervisors and approximately 45 payment processors who posted $24.4 million a month. (stats reflect September 2002). The Research Department was staffed with 2 Supervisors, 3 leads and 34 frontline staff. Working endlessly to resolve research items, over 6% of the total payments required additional research. The Customer Service Department employed 35 full time representatives who handled approximately 30,000 customer calls per week and more than 120,000 calls on a monthly basis. At fiscal year end 2004, Michigan was the fourth highest in the nation in total distributed collections, at $1,414,387,900. In 2006, the MiSDU printed 3,908,168 checks, processed 1,931,492 direct deposit requests and disbursed 999,895 transactions to recipients child support debit cards. Currently 65% of all payments received are electronic. The Employer Outreach team operates at full capacity with 1 Manager and 2 EFT Specialists. The mail room and reconciliation areas have been combined and now employ 4 scanners, 3 reconciliation clerks and 1 Supervisor. The payment processing department has 1 Supervisor, 1 lead, and 11staff members who processed 634,630 transactions totally $96.8 million in payments for the month ending September. The Research Department has 1 Supervisor, 2 leads and 10 front line staff. Today, on average, 1.3% of the payments require additional research. Our Customer Service Department is host to 1 Manager, 1 Supervisor and 1 Lead worker. Eight customer service representatives (CSR s) answer phones and take approximately 3,000 calls per week - or 15,000 calls per month. Each CSR handles roughly 400 customer calls per week. Year ending, the MiSDU printed 583,819 checks, processed 3,360,356 direct deposit requests and disbursed 3, transactions to child support debit cards. At the MiSDU, we are committed to continually seeking process improvements, streamlining program efficiencies, and providing value added services to our program partners and the families that we serve. 2

3 ACH Debit & ACH Credit Report Card Website Users Number ACH Debit Website Transactions ACH Debit Electronic Funds Transfer The alternative to paper The growing popularity of electronic payments and the Federal mandate for some states to pay child support electronically, makes EFT a viable payment option for employer support submissions. Save time and money by Save time and money by remitting your employees child support obligations electronically from your bank to our bank ACH credit. Or via the MiSDU website - ACH debit - at By the Numbers EFT Conversions YTD Comparison As the numbers indicate, many businesses and obligors are taking advantage of the ACH payment option, and are converting from paper-based payment methods to electronic transfers for payment of support obligations. In addition to improving efficiency by saving both time and money, most employers, employees, and payees appreciate the option of paying and receiving funds electronically. Paper checks never have to change hands. And, as an added benefit, electronic payments are also environmentally friendly and can literally save tons of paper ACH Credit FYTD YTD 3

4 Employer Resources Michigan Business One Stop website, located at --,00.html is a one-stop resource center that contains a plethora of resources and tools to help new and current owners start and operate a business in Michigan. You ll find resources for employers about child support and new hire reporting, and tips from writing a business plan, to financing your business. The website features a handy tool called Try Business One Stop that allows users to create scenarios for starting different types of businesses. If you re not sure whether you want to be a barista, a cycle shop owner, or a business consultant, check out Michigan Business One Stop and learn the state requirements for getting your business started. Need tax documents, permits, or licenses? No problem. Find the resources here. You might ask, Why Michigan? Michigan Business One Stop has the answer. Not too handy with the computer? No worries MBOS has a One Stop tutorial with your name on it. Check out the partial list of resources below: Child Support - Employer Resources Federal Unemployment Insurance Act Income Tax Withholding Michigan UIA Requirement for Payroll Taxes Unemployment Insurance Access the website at and take a One Stop Tour. You won t be disappointed. Explore Payroll Learning Paths Need help choosing the education options that match your job responsibilities? Looking to maximize your education dollars? APA Learning Paths are designed to guide you through APA's educational offerings. Explore Learning Paths Revised Form I-9 Must Be Used Now Beginning May 7, 7 the revised version of Form I-9, Employment Eligibility Verification, must be used by employers to verify the identity and work authorization of newly hired employees. Check out the new form and an employer handbook with detailed information about its completion. Garnishments Forum Learn the latest on state and federal garnishment laws and procedures at APA's Garnishments Forum. One-day seminars are offered nationwide during August or participate online with the four-part webinar series, live or on-demand. For more information, please visit American Payroll Association at The Michigan Works! Annual Conference will be held at the Mt. Pleasant Casino & Resort, September For more information, contact your local Michigan Works! Agency, or visit 4

5 State of Michigan Income Withholding Information The chart below affects only those employees with active Income Withholding Notices When to Start Withholding When to Send Payment after 1 st pay date Exception to Federal CCPA Limits Mandatory Deductions Allocation of Orders When to Send Termination Notice to FOC How Long to Retain Order after Employee s Termination Maximum Admin Fee (optional) days after service days after pay date of disposable income Federal tax State tax City tax FICA Prorate Promptly Until notified by agency; IWN stays in effect even upon return to employment EFT payments: $1 each pmt; not to exceed $2 per month. Paper payments: $2 each pmt; not to exceed $4 per month. Legislative Cite: M.C.L , , , a, , IWN If employee is rehired, unless otherwise notified by agency, please re-activate IWN. PAGE 1 PAGE 3 Employer Advisory Committee Addressing the needs of employers and planting the seeds of responsiveness throughout the business community. If you are an employer who would like the opportunity to share ideas, concerns and solutions relevant to child support administration, please call , or misduoutreach@michigan.gov misduoutreach@michigan.gov MiSDU Proudly powered by Informatix, Inc. 5