What Employers Need to Know About New Hire Reporting

Nailing down the perfect new hire is not necessarily a simple process. You review several resumes, interview numerous qualified individuals and finally pick the perfect employee who meets all the criteria and, even more-so, adds a positive new perspective to your team. The hardest part is over; now for the paperwork, which is tedious, but required. As all employers know, Forms W-4 and I-9, as well as a verified Social Security number are all required for new hires. However, did you know that you must also report new hires to your state?

In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) established a new regulation that each new employee must be reported to a designated state agency. There are two ways in which employers can go about reporting new hires. First, employers have up to 20 days to file on paper. Or, employers can file the information electronically or by magnetic tape every 12 to 16 days. Individual states may set reporting time frames that are shorter than federally required. In those cases, employers must follow the reporting rules established by their state.

Once the state receives the new hire information, it transmits the report to the National Directory of New Hires (NDNH). At this point in the reporting process, state and federal agencies detect errors and fraud in programs including employment security, workers’ compensation, child support and public assistance programs.

An employee is considered a new hire if:

  • he/she has never worked for the employer before, or
  • the employee has not worked for the employer’s company for more than 60 consecutive days, in circumstances where there was a previous employment.

Employers may simply report new hires with a copy of the employee’s Form W-4 or an equivalent form created by the employer, or the state. Federal law requires seven pieces of data to be collected for the new hire report:

  1. Employee name
  2. Employee address
  3. Employee Social Security number
  4. Date of hire
  5. Employer name
  6. Employer address
  7. Federal Employer Identification Number (FEIN)

***As some states require additional information, please check with your state agency for specific requirements.

Employers who hire workers in multiple states have two choices; report the new hires to the state in which they work, or report all new hires to one state. If an employer selects to report all new hires to one state, the employer is required to inform the Secretary of Health and Human Services in writing of the state selected, and must submit all new hire reports electronically or on magnetic tape.

As part of our payroll service and compliance commitment to clients, BenefitMall reports new hires to the designated state agency on our clients’ behalf at no additional cost, giving employers one less thing to worry about. For more information on BenefitMall payroll, please complete the Request a Quote form on our Payroll Services web page or call us at (800) 362-9519.