With the new year may come the need for new hires, so it’s a good time for a refresh on new hire reporting. As you likely already know, you, as an employer, are required to submit information on newly hired employees on a regular basis. New hire reports aid states in finding non-custodial parents, establishing a child support order or enforcing an existing order.
States also share the information from your new hire reports to the National Directory of New Hires (NDNH). Having the information circulated on a national level is important because 30 percent of child support cases involve parents who do not live in the same state as their children.
So how much work is it for you? The majority of the information you need to submit is information you already have. It can be found on your employee’s W-4 form.
Each new hire report must contain seven data elements:
- Employee name
- Social Security number (SSN)
- Date of hire (the date an employee first performs services for pay)
- Employer name
- Employer address
- Federal Employer Identification number (FEIN)
The new hire reporting process does take time, but it’s not something most employers would consider a major effort or cost. If you don’t do it correctly or on time, you could receive a fine for noncompliance.
In addition to child support tracking, new hire reporting can also help prevent unlawful public assistance. For example, if your new employee is receiving welfare, food stamps or Medicaid payments, this report would alert social agencies to investigate further.
New hire reporting was originally established as part of welfare reform legislation. The process can also reduce or prevent fraudulent unemployment and workers’ compensation payments.
Here are a few more things you should know about submitting new hire reports.
- Federal law dictates that new hires must be reported within 20 days of the date of hire. Some states have established shorter time frame requirements. It’s important to follow the reporting time frame of the state to which you report.
- Multi-state employers may report newly hired employees to the states in which they are working, or select one state where you have employees working. Once you’ve established where you are going to submit, there are three ways to do it: first-class mail, magnetic tapes or electronically.
- In some cases, you will need to make two report submissions per month, so be sure to check with your state to learn the requirements specific to your company. Because there are exceptions and nuances to the new hire reporting rules, mistakes can happen easily.
FrankCrum can relieve you of this burden. We have an entire department of experts dedicated to processing this type of paperwork properly and in the best way possible for you and your employees. It’s just one of the benefits we offer our clients.
This article was contributed to by Alison Cammick.