Employers have numerous responsibilities to fulfill in the course of running a business. It’s a dynamic blend of administrative, strategic, and business tasks. Whenever a new employee comes on board, it’s not just about getting their information in the payroll system, signing new forms, and completing the onboarding process. Employers are also responsible for completing a new hire report.
What is a “new hire report”?
A new hire report refers to the submission of information on a company’s newly hired employees. It is the responsibility of employers to report these pieces of information to a designated state agency within a specific period after the official date of hire. The date of hire is the employee’s first day of doing paid work with the company.
What do you mean by “newly hired employee”?
A newly hired employee is an individual who joins the organization for the first time. A “newly hired employee” can also be somebody who has previously worked for the company but has been separated from the said employer for at least 60 consecutive days.
Why is a new hire report required?
All employers are required to report new hires and rehires. This is under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) which is a federal law. It is implemented by agencies both at the federal and state levels.
Why is a new hire report important?
New hire reporting is crucial in helping parents of children who are entitled to payments under child support orders. For many child support cases, the parents may live in different states which may pose a challenge when it comes to obtaining child support. By having a national directory for all new hires, state child support agencies can obtain information efficiently and facilitate the process of wage garnishments as needed.
Additionally, new hire reports can help prevent and identify fraud in benefits systems. Having updated new hire data also allows states to check and cross-match information against unemployment insurance claims.
What are the pieces of information that an employer must submit?
Under the PRWORA, employers need to report the following information on newly hired employees to their designated state agency:
Social Security number (SSN)
Date of hire (the date the employee first performs services for pay)
Federal Employer Identification Number (FEIN)
If you are an employer, please check your state’s reporting requirements as some U.S. states require more information.
I am an employer. When should I submit a new hire report?
Federal law requires that employers report new hires within 20 days of the date of hire. This time frame is shorter, depending on state requirements. To ensure that you submit on time, check with your state requirements.
What will happen if an employer does not report new hires?
If an employer does not submit new hire information, the state can impose civil monetary penalties. The fine can be $25 per newly hired employee. This can be increased to $500 per newly hired employee if there is a conspiracy between the employer and employee to willfully fail to report new hires. Other than these fines, states can also impose non-monetary civil penalties.
What about independent contractors? Are employers also required to submit a new hire report for them?
There is no federal law that requires employers to submit new hire reports on independent contractors. However, some U.S. states do. To avoid confusion and noncompliance, it is best to check your state requirements on this one. You can check the State New Hire Reporting Contacts and Program Information for state requirements.
What about employees who were terminated and then re-hired?
The answer to this question depends on the number of days that the employees have been separated. If the employee has not been in your employ for more than 60 consecutive days, yes you need to report them as a new hire. However, if the employee has not yet been removed from your payroll records and has returned to work for your company within 60 days of being separated, then you are not required to report them as a new hire.
How can employers file a new hire report?
If you are an employer, there are a few ways that you can submit new hire reports to the State Directory of New Hires. You can report via first-class mail, magnetic tapes, or electronically. However, again you must check with your state. Some states may offer other ways of new hire reporting such as email, fax, and website correspondence.
What about multistate employers? How can they report new hires?
If you are a multistate employer, you have two options to choose from in reporting new hires. You can do either of these two:
Report newly hired employees to the state where they work
Choose one state where you conduct business where you will report all new hires
Please keep in mind that if you decide to report all new hires to just one state, you must register with the Secretary of the U.S. Health and Human Services (HHS) as a multistate employer and submit new hire reports electronically or by magnetic tape to the selected state. Reports can be made up to twice a month, 12 to 16 days apart.
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