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Phase 1 Report of Feasibility Study on New Hire Programs for Canada: New Hire Programs in the United States
RESEARCH REPORT
ENDNOTES
[1]An ethnographic study found that half of mothers claimed that they were cooperating with support enforcement. However, an equal proportion were engaging in "covert non-compliance, meaning that they had given false or misleading information to child support officials in order to protect the identity of ... their children's fathers" (Edin, 1995:206). The author concluded that the 'make 'em pay' strategy currently employed by the government will never be enough to alleviate the poverty of most welfare-reliant children," in part because of the financial, social and psychological incentives for welfare mothers and their children's fathers to resist the current system. She recommended that child support awards be collected like social security taxes, automatically adjusting for drops and increases in earnings. Citing research that found that tough enforcement procedures have the effect of increasing poverty rates for non-custodial fathers, Edin suggested that fathers who earn less than average wages should be assessed realistic amounts. "Hooking low-income men into the system early on may also have the effect of keeping more of them in the legal economy rather than encouraging underground earnings or criminal activity" (ibid.:227).
[2]The Center for Law and Public Policy also concluded that the IV‑D caseload figures were probably overestimated, "partly because the U.S. census data shows that there are considerably fewer single-parent families than there are IV‑D cases nationwide" (Center for Law and Social Policy, 1998:7).
[3]One state informant said that the $25 registration fee for non‑AFDC clients had been eliminated, but she may have only meant that the fee had been eliminated in her state.
[4]The Temporary Assistance for Needy Families (TANF) program introduced five-year welfare time limits and new eligibility restrictions for public assistance.
[5]Each calendar quarter, financial institutions must give the child support agency the name, address, social security number and other identifying information of all delinquent non-custodial parents whom the child support agency identifies as having an account.
[6]The states can be reimbursed for two thirds of the cost of running the child support agency, but federal reimbursement for judicial processes is limited. For example, it is not available to pay judges or other court personnel. There are, therefore, financial incentives for states to move towards a fuller administrative process.
[7]Unfortunately, the 1992 evaluation report's discussion of occupational mobility is both complex and confusing. It is difficult to draw any general conclusions from the analysis, other than that the targeted industries have high turnover rates.
[8]By the third quarter of 1995, 23 states had new hire programs, with New York and Ohio requiring programs by January 1, 1996. According to a Florida report, 8 of these 23 states had voluntary programs and 15 had mandatory programs. Of the mandatory programs, 8 required participation by all employers, 4 were restricted to all employers within targeted industries, 2 excluded employers with less than a specified number of employees, and 1 state targeted only employers with a high employee turnover rate. By the time the President signed the PRWORA in August 1996, 26 states had some form of employer reporting.
[9]The targeted industries in Oregon were general building contractors, special trade contractors, lumber and wood products, trucking and warehousing, wholesale durable goods, auto dealers and service stations, business services, and auto repair services and garages.
[10]Presumably, these were businesses with large numbers of employees, although the precise number is not reported. There is a suggestion in the literature that the Texas voluntary program was not successful, and that staff did little proactive employer outreach.
[11]Examples include the Associated Industries of Florida, the Home Builders Association, the Hotel and Motel Association, the Retail Federation and the National Federation of Independent Business.
[12]The Florida program targeted employers with more than 250 employees, was voluntary and was initially designed to increase child support collections and to reduce unemployment insurance fraud.
[13]An employer must file a W‑4 form with the Internal Revenue Service (IRS) when claiming two or more withholding allowances, or when an employee claims exemption from income tax withholding and his or her wages are more than $200 per week.
[14]To compensate employers for the expense of withholding employee wages, most states have given employers statutory authority to take a small processing fee from the employee's wages. This fee is optional, and varies from state to state. For example, Massachusetts allows one dollar per withholding, while in Alaska employers may deduct up to five dollars per cheque.
[15]An administrative review can be requested in the event of error. Liability for errors is not discussed in the material available.
[16]5.8 percent x 58 percent x 33 percent = 1.1 percent.
[17]From the data provided, we could not determine how this figure of $20.2 million was calculated.
[18]We found only three sources referring to the Interstate Child Support Commission and its recommendations: a payroll publication (ProPub, Inc., 1993); a Texas internal memorandum dated July 1993; and a 1996 paper by Legler. It is plausible that the Clinton Administration picked up this recommendation and incorporated it into the first welfare reform package. On the other hand, it is also possible that the Administration independently decided that new hire programs would be beneficial.
[19]Alabama, Hawaii, Iowa, Massachusetts, Mississippi, Rhode Island and West Virginia have apparently elected to use shorter time frames. See Becker, 1998.
[20]According to Becker (1998), Washington state asks employers to provide their unemployment account number and business identifier number. Iowa requires medical insurance. Pennsylvania plans to require the employee's date of birth, and the employer's contact name and telephone number.
*Editor's note: All Internet addresses were available online as of February 1, 1999, unless otherwise noted.
