Do You Know How to Report New Hires?
Bringing on a new hire is an exciting time for both employer and employee. While the onboarding process can be cumbersome at times, one requirement that can’t be overlooked is new hire reporting.
Learn how to report new hires in your business through our series of common questions and answers so you can rest assured you’re meeting state and federal requirements.
Q: Why do I have to report new hires?
A: The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 made it a federal requirement for all private, public, government, and not-for-profit businesses to report newly hired employees to the state level.
The following are just two ways state governments may use reports to enforce laws and benefits as needed.
Custody and child support
New hire reports can help to locate non-custodial parents, collect child support from parents who fail to update their place of hire, and streamline the child support income withholding order process.
Uncover and stop fraud
States may also use new hire reports to detect, prevent, and stop unlawful welfare assistance, unemployment benefits, and worker’s compensation claims.
Q: What if I’m a multi-state employer?
A: There are two options for reporting new hires if you are a multi-state employer. You can report them to the state in which they work. Alternatively, you could select one of the states in which you have at least one employee that works and report all of your new hires to that state. If you choose the later, you must register with HHS as a multistate employer, designate a state you will report to, and submit new hires electronically or by magnetic tape no more than twice a month.
Q: How do I report a new hire?
A: You may submit reports electronically or through the mail under federal law. Some states offer additional submission options, including email or a Form W-4. Check your state’s new hire reporting requirements here.
Q: What information do I need?
A: No need to hire a private investigator. You should have all the information you need when reporting a new hire from their application and onboarding paperwork. This includes:
- FEIN (federal employer identification number)
- Your business name and address
- Full name of the employee
- Current address of the employee
- Employee’s SSN
- Date of hire
When submitting new hires, make sure your state doesn’t require additional information, such as a birthdate or health insurance availability.
Q: I didn’t realize I was supposed to. What should I do?
A: Federal law requires all new hires to be reported within 20 days. State laws may require you to submit within a tighter window.
If you have not been reporting new hires, go through your records and report all employees hired within the last 180 days. Make changes to your onboarding process to ensure all new hires are reported within 20 days of their hire, or within your state’s unique time window.
Reporting new hires is a legally required process. Failure to do so can result in federal fines of up to $25 per employee not reported. In some circumstances, states can fine up to $500 per employee along with non-monetary civil penalties for noncompliance.
Q: Do I have to report new hires who quit before their first day on the job?
A: Yes. A hire must be reported once they accept an offer of employment, even if they never work a full day.
Q: Do I report terminated employees?
A: Unlike hired employees, not all terminated employees must be reported to the state. Though regulations vary by state, most only require a termination report if the employee has a child support income withholding order.
Learn How to Stay Compliant
There’s more to onboarding new hires than handbooks and I-9 forms. Make sure you understand how to report new hires and when to report terminated employees. You’ll be doing your part to help enforce statewide benefits and laws while avoiding repercussions.
If you have any other questions, please reach out to us at 630.928.0510.