New Hire Reporting Requirements for Employers

In 1996 Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). This act established the means for a standardized withholding order form for child support and the establishment of a centralized collection agency for each state. In addition, PRWORA established the new hire reporting process so that each state could track non-custodial parents.

What Are the New Hire Reporting Requirements?

The U.S. Department of Health and Human Services, Office of Child Support Enforcement (OCSE), has oversight over the new hire reporting program. Although new hire reporting is required by federal law, each state administers its own program. Each state matches new hire reports with state and federal child support records in order to locate parents who owe child support.

PRWORA also places an obligation on every employer to report the hiring of a new employee within 20 days of the date the individual is hired. Employers who report new hires electronically or magnetically may submit two transmissions a month instead, as long as the submissions are at least 12 days apart but no more than 16 days apart.

According to the OCSE many states accept, at the employer's option, input through the following media: 1) mail, 2) fax, 3) interactive telephone systems, 4) e-mail over the internet, 5) state websites and 6) other electronic or magnetic media. Employers who use any of the first five methods must report new hires within 20 days of hire.

What Information Must Be Reported?

Under Federal law six elements of data must be reported for each new hire, three of which are related to the employer and four of which relate to the employee.

The employer must provide the following employer information:

Federal Employer Identification Number (EIN)
Employer's name associated with the above EIN
Employer's address associated with the above EIN

It is important for an employer to use the correct name and address when reporting new hires. Many businesses have fictitious names or may have a mailing address or location that differs from the businessís legal address. In addition, some businesses may have multiple EIN's for employees working at different locations, so the company's legal address must be used.

The employer must provide the following employee information for each new hire:

Social Security number
Employee's full name as it appears on his Social Security Card
Employee's current residential address
Date of new hire

This emphasizes the importance of the employer actually seeing the employee's Social Security card. Although the employee must provide his name and Social Security number on Form W-4 and Form I-9, it is the responsibility of the employer to verify that the name on the employee's Social Security card actually matches the name on the form. In addition, the address that must be provided during the new hire process must be the employee's residence, not a PO box number.

Another point to note is that as of April 21, 2012, the Trade Adjustment Assistance Extension Act of 2011 requires that if a new employee is actually a re-hired employee, that designation must be reported separately to the state. A re-hire is defined as an individual who was previously employed by the employer but separated from such prior employment for a least 60 consecutive days.

What If an Employer Has Employees Working in More Than One State?

If an employer has employees working in more than one state, then it has two options for reporting new hires.

Report each new hire to the state where the employee is working, or
Report all new hires to a single state.

If the employer chooses to report all new hires to a single state, then the employer must report all new hires electronically. The employer must also register with the Federal Department of Health and Human Services designating which state will receive all their new hire information. Multi-state employers may register online.

Reporting New Hires Online

One of the most convenient ways for employers to report new hires is to do so online. Each state has a website for administering new hires. For a list of all states with links to their new hire reporting websites, see the "State New Hire Reporting Websites" page on the OCSE website.

To initiate the use of online new hire reporting, an employer must first register on the state's website. Once this process is completed, only the employeeís information needs to be reported each time a new employee is hired. The confirmation report can be printed and filed in the employee's personnel file.

Child Support Enforcement and New Hire Reporting

Non-custodial parents are often under obligation to provide support for their children. PRWORA places each employer under the obligation to report new hires so that their information may be matched to the national child support database. By reporting each new hire employers are helping families that need financial support from non-custodial parents receive that support.