New Hire Reporting: What is Required?
Adding a new team member is much more than just filling an open position. Aside from the training and onboarding that comes with a new hire, you also need to report their employment to the designated state agency for which you reside. Failure to do so is a direct violation of The New Hire Reporting Program which was mandated by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. New hire reporting information can be used for several different reasons, the most common being the collection of child support, revealing fraud in unemployment compensation, workers’ compensation and welfare programs.
REPORTING REQUIREMENTS
As an employer, you are required to report certain criteria for each new hire. Federal law requires you provide the following:
Name, address, and social security number of the employee
Date the employee first performed services for pay
Name, address, and federal employer identification number of the employer
A new hire also includes those individuals who were previously employed by the organization but have not worked for that employer for at least 60 consecutive days. This requirement came about in April of 2012, but it also allowed each state to add to the requirement. For example, in Massachusetts and South Dakota, the time frame is 30 calendar days or more, while other states such as Pennsylvania opted for more than 30 days. Some states, such as West Virginia, require new hire reporting regardless of time away. This means an employee could leave their company on Monday and be re-hired on Wednesday and the company would still have to report their previous employee the way they would if they hired someone else. If you’re unsure with the new hire requirements of your state, you can learn more here.
HOW TO REPORT
Employers can report their new hire using either the information on the employee’s federal W-4 (Employee’s Withholding Allowance Certificate) or an equivalent form that requires the same information. This information can be sent via first class mail, fax, or over the internet. There are a few drawbacks to using the employee’s W-4 form to complete your new hire reporting. First, there is no portion on the W-4 where an employer can place their identifying information. Also, there is no spot on the W-4 for the employee’s date of birth. Since the W-4 cannot be altered, it is recommended that the employer make a copy of the original document and simply write the additional information on the form before filing it.
NEW HIRE REPORTING DUE DATES
Federal law states employers have 20 calendar days from the date of hire to report their new employee. Date of hire is the first day of services performed in exchange for wages. It is important to note that even if you have a new employee work only one day, they must still be reported. Depending on how an employer reports their new hire, they may be responsible for sending multiple notices. For example, if an employer reports a new hire electronically, they will need to send two transmissions per calendar month that are 12 to 16 days apart. This is a federal guideline, so be sure to check with your state to see if there are additional time frames surrounding this. If you’re a multistate employer that submits new hire reporting twice a month, you will need to submit the newly hired employees' information as soon as you can after their date of hire.
MULTISTATE EMPLOYERS
Employers with employees in two or more states can designate one state where they have employees as the state they report all new hires. This means multistate employers do not have to report the required elements for every state in which they have employees, just the one they have designated for reporting. For a multistate employer to file all their new hires in one state, they must designate a state (in writing) to the Department of Health and Human Resources.
FAILURE TO REPORT
Civil penalties can be imposed by the state if an employer fails to report their new hires. Legally, the fine cannot exceed $25 per employee with a maximum of $500 if the failure is due to a conspiracy between the employer and the employee. Depending on the state the employer reports in, there are different reporting time frames, penalties, and methods for reporting.
As an employer, be sure to familiarize yourself with your state's rules and regulations surrounding newly hired employees and how you can report their employment. If you’re interested in learning more about a software that will automatically report your new hires for you, please either get in touch with our team or request a demo below.