A new hire report is sent by a US employer to their relevant state Directory of New Hires and contains basic information about a newly hired employee and their employment. These details are then sent to the National Directory of New Hires where they can be cross-checked against child support orders and claims for workers’ compensation and benefits.
Employers are required to report new hires under US federal law, specifically the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). The National Directory of New Hires allows states to share and crossmatch data to assist with locating parents for child support payments and preventing and identifying unemployment benefits and workers’ compensation fraud.
At the federal level, this process is governed by the PRWORA. States may also have additional requirements for new hire reports. The Office of Child Support Enforcement provides a list of state Directories of New Hires, their contact details, and further information.
Who Has to File a New Hire Report?
All employers must file new hire reports. This includes all public, private, and non-profit businesses, government agencies, and labor organizations.
What Is a New Hire?
Under the PRWORA, a newly hired employee is an employee you haven’t employed before or a previous employee who has been separated from their employment with you for at least 60 consecutive days.
An employee who returns to work within 60 days and has remained on your payroll records is not a new hire. However, if they have to complete a new W-4 form, you should also send a new hire report for them.
If you’re an employer with offices across multiple states, you’re not required to send a new hire report each time you transfer an employee, as their information is already in the national database.
At the federal level, independent contractors are not new hires for reporting purposes. However, states can take a different approach. Check with your state Directory of New Hires whether you’re required to report independent contractors.
When Do You Need To Send a New Hire Report?
Under the PRWORA, you must send a new hire report within 20 days of the date of hire (i.e. the first day of work the new hire receives compensation for). States may impose shorter timeframes, so it’s important to confirm with your relevant State Directory.
You must send a new hire report even if the employee quits or is fired before the deadline for their new hire report.
How Do You Submit a New Hire Report?
Under the PRWORA, you can submit a new hire report electronically or via magnetic tape or first-class mail. Some states accept new hire reports in other ways such as via a website, email, or fax.
You must send a new hire report to the Directory of New Hires in the state where the employee works.
If you hire employees in different states you can either report new hires to the individual states where they work or report all new hires to one state. If you choose to do the latter, you need to
- register as a multistate employer with the Department of Health and Human Services (via the Office of Child Support Enforcement)
- nominate your designated reporting state
- send all new hire reports no more than twice a month (12-16 days apart) electronically or by magnetic tape.
What Information Is Required in a New Hire Report?
A new hire report must include the
- employee’s full name (associated with their Social Security number)
- employee’s address (their residence)
- employee’s Social Security number (a unique identifying number given to US citizens and residents to track their financial information)
- date of hire (the date the employee first performs services for pay)
- employer’s Federal Employer Identification Number (FEIN—a nine-digit number used by the IRS to identify the employer)
- employer’s name (the legal name associated with the FEIN)
- employer’s address including city, state, and ZIP code (associated with the FEIN).
This is the information required under the PRWORA—states may require additional details.
When it comes to the format of a new hire report, you can submit a copy of the employee’s W-4 form, a form you have created for new hire reports, or a form provided by your state Directory of New Hires. Confirm with your relevant state Directory what is required.
What Happens if You Don’t Provide a New Hire Report?
If you fail to send a new hire report within the required timeframe, you can face fines. Non-monetary civil penalties under state law may also apply for non-compliance.
Fines can range up to $25 for each new hire not reported and up to $500 for each new hire if there is evidence of an agreement between you and the employee to deliberately not report.
Employers are required by federal law to send a new hire report to their state Directory of New Hires soon after their employment starts. A new hire report includes details about an employee—such as their name and address—as well as the employer and the start date of employment.
The information in new hire reports is stored on a national database and used to enforce child support payments, as well as address workers’ compensation and benefits fraud. It’s important to incorporate new hire reports as part of your standard recruitment process to ensure you don’t miss filing one.
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