You hired an employee. You had them fill out Form W-4 and Form I-9. They read the employee handbook. You put them through training.
That’s all you have to do, right?
Did you know that you also have to report your new hire to your state within a short amount of time? This process is called new hire reporting. So, what is new hire reporting?
What is new hire reporting?
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) requires you to report all newly hired employees to your state. The Act also applies to any employees you rehire.
Federal law does not require you to report independent contractors. However, some states require you to report independent contractors.
New hire reporting applies to all private, public, government, and not-for-profit employers. No business is exempt from reporting.
Why do you need to report new hires?
When you report new hires to your state, the state will use the information to enforce laws and benefits.
States can use the new hire information for the following tasks:
- Accelerate the child support income withholding order process
- Collect child support from parents who frequently change jobs
- Locate non-custodial parents
- Detect fraudulent recipients of unemployment insurance
- Prevent and stop unlawful welfare assistance
- Stop false workers’ compensation claims
States also transmit the new hire information to the National Directory of New Hires. States have access to other state databases. Database access allows states to track down people who have moved.
How do you report new hires?
You must report new hires to your state agency that handles the state’s new hire reporting program.
To find the new hire reporting website for your state, consult the map provided by the Office of Child Support Enforcement (OCSE). The OCSE also has a chart of new hire reporting information by state.
Federal law gives you three methods for submitting new hire information: mail, magnetic tapes, or electronically. Your state might provide more options for submitting new hire information, such as fax, email, phone, or website reporting.
You might be able to report new hire information by using Form W-4, a state-designated form, or by designing your own form. Check with your state for details.
When do you report new hires?
PRWORA sets the basic time frame for reporting new employees. Federal law says you must report new employees within 20 days of hire.
States can mandate a shorter amount of time for new hire reporting. If your state has a shorter time period for new hire reporting, make sure you follow your state law.
You must report all new hires, even if they work one day. You must report new hires even if they are terminated before you complete the new hire reporting.
What information do you need to provide?
New hire reporting requirements vary by state. However, PRWORA sets the minimum information you need to report for each new hire. The basics are:
- Employer’s name
- Employer’s address
- Employee’s full name (first, middle, last)
- Employee’s address
- Employee’s SSN
- Date of hire
Make sure you check with your state to find out if you need to report additional information.
What if I’ve never reported new hires?
If you have never reported a new hire, report all employees you hired within the last 180 days. From then on, report hires within 20 days of their hire.
There are penalties for not reporting new hires. Each state determines how much the penalty will be. However, federal law says your state can fine you up to $25 per employee whom you did not report. Also, if you and employees create a conspiracy to avoid reporting, your state can fine you up to $500 per employee.
States can also impose non-monetary civil penalties for noncompliance.
Do I have to report terminated employees?
You must report a terminated employee if they have a child support income withholding order. You will report the termination to the agency that issued the income withholding notice. Check with your state for all reporting information, including how quickly you need to report the terminated employee.
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This article is updated from its original publication date of 4/13/2012.