When hiring a new employee, employers must report certain information to the state. All employers must comply, and failure to do so can result in fines. To help you understand what information must be reported and when, here are the answers to some frequently asked questions.
Q: What is the purpose of new hire reporting?
A: New hire information is entered into a government-run database that can be accessed by federal and state agencies to locate parents who owe child support and to prevent abuse of unemployment insurance, workers' compensation and public assistance programs.
Q: What information must be reported?
A: Under federal law, the following information must be reported:
- Employee’s name, address and Social Security Number (SSN)
- Date of hire (the date the employee first performs services for pay)
- Employer’s name, address and Federal Employer Identification number (FEIN)
Some states have additional requirements, such as reporting whether employer-sponsored health coverage is available to the employee. Check your state law to ensure compliance.
Q: How do I submit new hire reports?
A: Under federal law, employers have options for reporting new hires, such as submitting the new hire's Form W-4 or an equivalent form via first class mail, magnetic tapes, or submitting the information online. However, some states may require employers to use a particular reporting method. For example, in Alabama, employers with five or more employees must report new hires online through the state website. Check your state's new hire reporting program for requirements and options.
Q: Where do I submit new hire reports?
A: Each state has a designated agency to handle new hire reports. You can find contact information for your designated state agency here.
Q: How long do I have to report a new hire?
A: It depends on your state. In some states, employers are allowed up to 20 days from the date of hire to report new employees, but some states have shorter timeframes (e.g., 14 days or 7 days). Check your state law to ensure compliance.
Q: Which employees do I report?
A: Employers must report all newly hired employees as well as rehired employees. Under federal law, an employee is any individual who is considered an employee for federal income tax withholding purposes, and a rehired employee is an employee who returns to the employer after at least 60 consecutive days of separation from the company. Note: Some states define a rehired employee more broadly (e.g., after 30 days of separation).
Q: Am I required to report independent contractors?
A: It depends on your state. A growing number of states are requiring employers to report independent contractors.
Q: Must I report an employee returning from a layoff or leave of absence?
A: If the returning employee is required to complete a new Form W-4, or has been separated from your employment for a length of time that qualifies the individual as a rehired employee under federal or state law, you must report them as a new hire. If the returning employee hasn’t been formally terminated or removed from payroll records, or returns to employment within 60 consecutive days of separation, there is no need to report that individual as a new hire under federal law.
Q: If I obtain employees from a staffing agency, who reports the employees to the state?
A: If the staffing agency is paying wages to the individual, the staffing agency must submit the new hire report. If the employer is paying the individual, the employer must submit the new hire report.
Q: I hire the same seasonal employees year after year. Do I have to report them each year?
A: Yes. These employees would fall under the definition of rehired employees, and therefore they must be reported each year you rehire them.
Q: An employee quit before my state's deadline for submitting the new hire report. Must I still submit the report?
A: Yes. Any time wages are earned, the employer must report the new hire to the state, even when the employment relationship lasts a short time.
Q: If I hire employees in more than one state, must I submit a new hire report in each state?
A: If you are an employer with employees working in more than one state, you can choose one of the following options:
- Report newly hired employees to the state where they work; or
- Select one state where your employees work and report all new hires to the selected state.
If you choose to report all new employees to one state, you must:
- Register with the Department of Health and Human Services as a multi-state employer.
- Designate the state that you will report.
- Submit your new hires electronically or by magnetic tape to the state you have chosen, no more than twice a month (12 to 16 days apart), if necessary.
Q: How will my state know if I am complying with new hire reporting requirements?
A: States typically review employers' quarterly wage reports to confirm compliance with new hire reporting requirements.
|ADP offers a New Hire Reporting service to help you comply with new hire reporting laws. Contact your payroll service center for more information.