- November 6, 2017
- Posted by: Lee A. Schwartz, Esquire
- Category: Monthly Newsletters
Let’s start with the premise that Pennsylvania is an Earning Capacity state. What is earning capacity and how can it impact your Support Order?
First, a person cannot intentionally decrease their income, with the hope that this intentional decrease will result in a lower support Order. Let’s take the case of a fictional couple, Donnie and Marie. Donnie has practiced law for fifteen years. Marie, while a previously licensed civil engineer, was a stay-at-home parent since the date of marriage ten years ago. Donnie, anticipating that he and Marie are going to separate, voluntarily leaves his law firm, Dewey, Cheatum and Howe and takes a job at Target stocking shelves. What are Donnie and Marie’s earning capacities?
Donnie has voluntarily left his attorney job, where he was making $100,000.00 per year and now is earning $12.50 per hour, solely because he hoped to hurt Marie by having a lower support order entered for Marie. Not so fast, my dear Donnie. You voluntarily reduced your earnings. Donnie’s earning capacity should be found to be $100,000.00, or some income number in that neighborhood, and your support obligation will be based on that amount.
Marie, on the other hand, while a previously trained civil engineer, let her licensing lapse while working at home and hasn’t been in the work force, due to the joint agreement of the parties, for ten years. Marie undoubtedly will need more training before she can go back to work as an engineer and will need to renew her licensing. This could take a year, or eighteen months, to accomplish. Her earning capacity now might be $10.00-$15.00 per hour.
In addition to a voluntary reduction in earnings by a party, what if a party works part-time? Will that party have a higher earning capacity than the part-time earnings? In the vast majority of cases, yes. So, in our example above, if Marie takes a part-time cashier’s job at Bubbie’s Burger Bodega, working four hours a day for four days a week, the Court would likely take her hourly rate (9.00 an hour) and multiply that by forty hours a week, even though she is only working sixteen hours a week, to arrive at her earning capacity. We have an obligation to work full-time in Pennsylvania.
However, do we have an obligation to work more than full-time (defined as 35-40 hours a week)? Simply put, No. Donnie, while at Target, voluntarily takes overtime hours during the Holiday Season and works sixty hours per week. His support obligation will be based on the sixty hours per week that he is a actually working.
Let’s say that after the Holidays, Target keeps offering Donnie overtime but he decides not to work the overtime hours, and his schedule returns to a forty hour per week schedule. Can Marie argue earning capacity in that Donnie proved he can work sixty hours per week, so this is proven to be his earning capacity? Sorry Marie, the answer is “no”. Parties only have an obligation to work full-time hours.
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