From: Staffing
Introduction
All employers must report the hiring, rehiring, and return to work of all paid employees. A few of the many procedural goals of reporting are to detect fraud, help locate individuals for establishing paternity, and/or establishing, notifying, and enforcing child support orders. New-hire reports are matched against child support records at the state and national levels to locate parents that owe child support.
Federal law, located at 42 U.S.C.A. § 653a, requires each state to establish an automated directory (known as the State Directory of New Hires) which will contain specific information supplied by employers on each newly hired employee.
Reporting Process
Information to Be Reported
Federal law requires employers to collect and transmit several data elements to fulfill their new-hire reporting responsibilities. However, if a returning employee had not been formally terminated or removed from payroll records, there is no need to report that individual as a new hire.
Required information to be reported includes the following:
- Employee Information. The following employee information must be reported upon the hiring, rehiring, or return to work for all employees:
- Name.
- Address.
- Social Security number.
- Date of hire, rehire, or return to work.
- Employer Information. The following employer information must be reported upon the hiring, rehiring, or return to work for all employees:
- Name.
- Address.
- Employer Identification Number (EIN).
Employers are not required to report an individual if the work performed is based on a contract rather than an employer/employee relationship. However, some states have laws requiring new-hire reporting of independent contractors. In either case, the contractor is responsible for the reporting of their employees.
Any department, agency, or instrumentality of the United States must comply with the reporting requirements by transmitting the report to the National Directory of New Hires. Reporting is not required for an employee of a federal or state agency performing intelligence or counterintelligence functions if the head of such agency has determined that the new-hire reporting, with respect to the employee, could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission.
Means of Reporting
Employers may submit any of the following items via first class mail, fax, interactive telephone systems, email, state Web sites, other electronic or magnetic media:
- A copy of the employee’s Form W-4 or an equivalent form.
- Any other hiring document, data storage device, or mechanism authorized by state law.
Employers Operating in Two or More States
An employer with employees in more than one state has two options in fulfilling new-hire reporting requirements.
Multistate employers may choose either of the following:
- Abide by the new-hire reporting program of each state and report newly hired employees to the various states in which employees are working.
- Select one state where employees are working and report all new hires to that state’s designated new-hire reporting office.
Multistate employers who opt to report to only one state must submit new-hire reports electronically or magnetically. Such employers must also notify the federal Department of Health and Human Services as to which state they have designated to receive all their new-hire information. The National Directory of New Hires then maintains a list of multistate employers who have elected to use single-state notification.
When notifying the department, the multistate employer must include all generally required reporting information along with the following:
- The specific state selected for reporting purposes.
- Other states in which the company has employees.
- A corporate contact person.
- A list of the names, EINs, and the states where the employees are located if the company is reporting new hires on behalf of subsidiaries operating under different names and EINs.
Deadlines
Unless the submission is made electronically or magnetically, employers must submit information concerning every new hire within 20 days of the date of hire. States have the option of establishing reporting time frames shorter than 20 days. An employer reporting electronically or by magnetic medium is required to submit two transmissions each month (if necessary, based on the volume of hiring) at least 12 to 16 days apart. Employers must abide by new-hire reporting requirements for employees who quit before the reporting deadline because an employer/employee relationship existed and wages were earned. Employers need to report all new hires regardless of the short duration of employment.
Additional Information
Penalties
An employer who fails to make a report as indicated by law may be liable for up to $25 for each newly hired employee. Additionally, if the failure to make a report is the result of a conspiracy between the employer and the employee not to supply the report or to supply a false or incomplete report, the employer will be required to pay a fine of up to $500 for each such failure. Under state law, civil penalties for noncompliance with new-hire reporting may be either monetary or nonmonetary.
