Employers Are Required To Report New Hires
New Hire Reporting is the process by employers to report this information on newly hired employees to a designated state agency shortly after the date of hire. Businesses are required to report taxes and wages to varying federal and state agencies. Employers have a legal obligation to report new hires to the appropriate state agency within 20 days of hire.
The law defines a “newly hired employee” as:
(i) An employee whom the employer has not previously employed
(ii) Employed by the employer but has been separated from such prior employment for at least 60 consecutive days.
Benefits Of New Hire Reporting
Whereas wage withholding helps fund infrastructure such as bridges and roads, reporting new hires is an important step in child support collections and helping children and families receive the financial support they are legally entitled. New Hire Reporting gives child support enforcement specialists the ability to quickly locate and track parents with child support orders. It is necessary to know where parents are currently working to speed up the child support income withholding process. New Hire Reporting also helps interstate case processing, the most difficult kind of cases to enforce. It benefits the employee by continuously withholding income and medical support for their children with minimal interruption if they change jobs. This prevents the likelihood the parent will fall into non-compliance with their child support order, preventing fines and other possible penalties for non-payment.
New Hire Reporting benefits communities by preventing and reducing improper payments in public assistance programs, unemployment insurance (UI), and workers’ compensation. This helps to ensure taxpayer money is spent efficiently, reporting also serves to keep employers’ insurance premiums low.
What Employees Are Required To Be Reported
Employers are required to report ALL newly hired employees, including:
- Full-time and part-time employees
- Returning and re-hired employees
- Temporary and seasonal employees
- Employees that work as little as one day
- Any employee for whom you fill out a Form W-4
If an employee is paid wages, they must be reported, even if the wages are for only one day.
What Information Is Reported
Federal law requires you to collect and report these seven data elements:
- Employee’s name
- Employee’s address
- Social Security number
- Date of hire (the date the employee first performs services for pay)
- Employer’s name
- Employer’s address
- Federal Employer Identification Number (FEIN)
Individual states may require more information.