During our recent webcast, Key Steps to Successfully Onboard an Employee, we received dozens of questions focusing on employer’s responsibilities related to new hire reporting and new hire paperwork. To help employers who weren’t able to attend the webcast, we thought it would be helpful to share the answers to the most common questions in this Tip of the Week.
Q: Does ADP handle new hire reporting for its clients?
A: By way of background, federal law requires that employers submit certain information to their state regarding each new hire within 20 days of the employee's start date, but several states have shorter timeframes.
New hire reporting is included in many RUN Powered by ADP® packages, such as HR Pro, Complete, Enhanced, and Essential. However, if you have to fulfill these responsibilities on your own, you have several options, such as submitting the new hire's Form W-4 or an equivalent form. Check your state's new hire reporting program for details.
Q: For presenting the Notice of Coverage Options and Summary Plan Description to new hires, is that requirement based on number of employees?
A: No. Under the Affordable Care Act (ACA), all employers must provide a Notice of Coverage Options to all new hires within 14 days of their start date. This requirement applies even if the employer doesn't offer health insurance and/or the employee is not eligible for health insurance.
All employers with health benefits and/or retirement plans must provide a Summary Plan Description (SPD) to individuals when they become a participant in the plan or a beneficiary under such a plan. New employees must receive a copy of the SPD within 90 days after becoming covered by the plan.
Q: Can W-4s forms be completed electronically? If so, do I need to retain a hard copy of W-4s?
A: All new hires must complete a Form W-4 to determine the amount of federal income tax to withhold from their wages. Under federal rules, an employer may establish a system for its employees to furnish W-4s electronically.
The electronic system must ensure that the information received is the information sent and must document all occasions of employee access that result in the furnishing of a W–4. In addition, the design and operation of the electronic system, including access procedures, must make it reasonably certain that the person accessing the system and furnishing the W–4 is the employee identified in the form.
The electronic furnishing must provide the employer with exactly the same information as the current version of the official Internal Revenue Service (IRS) Form W–4 available on irs.gov.
The electronic W–4 system must provide the employee with the same information as the current version of the official W–4 available on irs.gov and must satisfy any requirements specified by the IRS in forms, publications, and other guidance.
The electronic furnishing must be signed by the employee under penalties of perjury. The perjury statement must contain the language that appears on the paper W–4. The electronic program must inform the employee that they must make the declaration set forth in the perjury statement and that the declaration is made by signing the W–4. The instructions and the language of the perjury statement must immediately follow the employee's income tax withholding selections and immediately precede the employee's electronic signature.
The electronic signature must identify the employee furnishing the electronic W–4 and authenticate and verify the furnishing. The electronic signature must be the final entry in the employee's Form W–4 furnished electronically.
Upon request by the Internal Revenue Service, the employer must supply a hard copy of the electronic W–4 and a statement that, to the best of the employer's knowledge, the electronic W–4 was furnished by the named employee. The hard copy of the electronic W–4 must provide exactly the same information as, but need not be a facsimile of, the paper Form W–4.
Several states have their own withholding forms and the rules regarding completing the form electronically may differ. Check your state law for details.
Q: If I'm subject to an I-9 inspection, will I have to provide access to I-9s for current and previous employees, or just current employees?
A: A Form I-9 must be completed for each new hire to verify the individual’s identity and that they are authorized to work in the United States.
Federal regulations require that employers must retain an I-9 for each person they hire for three years after the date of hire, or one year after the date employment ends, whichever is later. During the inspection by the federal government, if you fail to produce all I-9s for employees that fall within this retention window, you may face penalties.
| Note: It is a best practice to store all I-9 forms together in one file, since they must be produced promptly following the official request. |
Q: Can we use E-Verify in lieu of completing the I-9?
A: No. Employers that use E-Verify must still complete a Form I-9 for each new hire. E-Verify is an internet-based system operated by the federal government that enables employers to determine a new hire’s eligibility to work in the United States. E-Verify checks whether the information on a new hire’s Form I-9 matches government records in Department of Homeland Security (DHS) and Social Security Administration (SSA) databases, and whether the new hire is authorized to work in the United States.
Q: How does the I-9 apply to minors? Does a parent or guardian complete the I-9?
A: A Form I-9 must be completed and retained for newly hired minors as well. To complete Section 2 of the I-9, employees must present documents for this verification. The I-9 includes a List of Acceptable Documents (List A, List B and List C). An employee must present one document from List A, or one document from List B and one document from List C.
| List A documents: establish both identity and employment authorization |
Minors can complete Form I-9 by presenting a List A document or a combination of List B and C documents. If a minor is unable to present an identity document from List B, a parent or legal guardian may establish identity for the minor by completing the I-9 as shown here.
| Note: If the employer participates in E-Verify, parents or legal guardians cannot establish identity for a minor as described above. The minor must present either a List A document, or a combination of a List B document that contains a photograph and a List C document. |
Conclusion
Make sure your onboarding process complies with applicable laws, helps you make a positive first impression and builds a solid foundation for the rest of the employment relationship.
Want to learn even more about onboarding? You can gain additional information in our: