Whether you’re starting a new business, or you’ve been hiring for years, you’re legally required to register any new employees with the state—and failure to do so can lead to monetary penalties.
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), also known as welfare reform, requires all employers to report certain information on their newly hired employees to a designated state agency. New hire reporting calls for a little bit of preparation and some new hire paperwork, but don’t fret! We’ll walk you through how to do it below.
(In this article you’ll see the phrase “register your new hire” or “report your new hire.” These mean the same thing and are used interchangeably throughout the article.)
Are you a Gustomer? Our partner CorpNet will take care of registering your employees in the proper state. See here for more details.
Who is considered a “new hire” for reporting purposes?
The reporting requirement applies to an employee who:
- You haven’t previously employed, or
- You have previously employed—but haven’t employed for at least 60 consecutive days.
Why does the government require employers to report new hires?
The government uses this information for multiple purposes, including the following:
- To help track down parents who owe child support but are living in different states than their children
- To detect and prevent fraudulent payments under programs like workers’ compensation and unemployment insurance compensation, as well as various forms of public assistance (like food stamps and Medicaid)
Which information am I required to report?
This varies from state to state, but PRWORA requires employers to report the following:
- The employee’s full name
- The employee’s address
- The employee’s Social Security number
- The date of hire (the day an employee first performs services for wages)
- The full name of the business or employer
- The business or employer’s address
- The business or employer’s federal Employer Identification Number (FEIN)
Some states require additional information, though. You can find specific state-by-state requirements here.
What if I’m missing one of those pieces of information?
You should collect most of the information when the employee completes a Form W-4.
If your business doesn’t have a FEIN yet, you’ll need to get that before reporting employees, by filing Form SS-4. (This guide will walk you through all of the steps you need to set up your business.)
Employees who don’t have a Social Security number should complete Form SS-5.
Which address should I use—the location where the employee works or the location of our payroll office?
When the employee works at an address that’s different than the payroll address, you should report both addresses.
What should I do if my new hire quits before their new hire report is due?
Even if the employee quits, you’re still required to submit a new hire report so the federal government has a record of this hire.
How do I report a new hire?
You’ll generally report the information to the State Directory of New Hires in the state where the employee works. The method varies by state, but typically you can report online or by first-class mail or fax.
We’ve got a handy guide where you can find your state here. You can access additional state-specific information about new hire reporting contact information, reporting time frames, data elements (mandatory and optional), and method of transmission here.
When do I need to report new hires?
For most states, you should report within 20 days of the hire date. For the following states, the requirement comes a bit sooner:
|Alabama||Within 7 days of hiring|
|Georgia||Within 10 days of hiring|
|Iowa||Within 15 days of hiring|
|Maine||Within 7 days of hiring|
|Massachusetts||Within 14 days of hiring|
|Mississippi||Within 15 days of hiring|
|Rhode Island||Within 14 days of hiring|
|Texas||Within 20 days of when the employee starts earning wages|
|Vermont||Within 10 days of hiring|
|West Virginia||Within 14 days of hiring|
See this page for state-by-state registration information and resources.
Do I need to register an employee I re-hire after a layoff or leave of absence?
Maybe. You should report employees if they’re required to complete a new Form W-4 or have been separated from your employment for at least 60 consecutive days. But, if the returning employee was never formally terminated or removed from payroll records, you aren’t required to report them as a new hire.
What about independent contractors? Do I need to register them as new hires?
It depends on the state. The following states have requirements for registering independent contractors:
- California: Within 20 calendar days of either: a) making payments for services totaling $600 or more, or b) entering a contract for services for $600 or more, whichever is earlier
- Connecticut: If payment is expected to exceed $5,000 per year
- Delaware: Optional for non-government employers
- Minnesota: Optional for non-state agency employers
- New Hampshire: If payment for services is expected to exceed $2,500, or if there’s a break in service of at least 60 consecutive calendar days and the expected or actual payment after the break exceeds $2,500
- New Jersey
- New York
- Ohio: If payment for services is expected to equal or exceed $2,500
- West Virginia: If payment for services equals or exceeds $2,500
What about temporary employees from an agency? Will the agency handle the reporting?
It depends on who pays the temp employees. If you, the employer, actually hire and pay the individuals, whether full- or part-time, you’re required to report them as new hires. However, if the agency pays the wages, the reporting responsibility falls on that agency to do the reporting. Be sure you connect with the agency to ensure proper reporting happens, so you don’t have to deal with penalties.
What if I have employees in multiple states? How do I register them as new hires?
If you employ and pay workers in multiple states, when it comes to reporting these new hires to the state, you have two options:
- Report new hires to the states where they work, or
- Select one state where you have employees and report all new hires, regardless of where they work, to that state.
If you opt to report all new hires to one state, you’ll need to register with the U.S. Department of Health and Human Services as a multistate employer. You can register online or download and fill-out the paper form, then you can either mail or fax the form.
Mail the form to:
Office of Child Support Enforcement
Multistate Employer Registration
P.O. Box 509
Randallstown, MD 21133
Or, fax the form to:
Once registered, you’ll designate the state to which you’ll report. You should report new hires electronically, no more than twice a month (12 to 16 days apart).
Can someone else handle new hire reporting for me?
Yes. A service provider can register an employer by following the steps above. But you can only select a state where you have employees for reporting purposes.
For example, say you have employees in California and New York, but you use a payroll provider with clients in all 50 states. The payroll provider can register you as a multistate employer, but you can pick only California or New York as the state where you’ll report.
If you’re a Gustomer, find out how our partner CorpNet can help you register your new employees in the proper states.
Is there a penalty for failing to report new hires?
States have the option to impose penalties for noncompliance, and many do. For states that do penalize employers to failure to report, the fine generally is limited to $25 per newly hired employee. If an employer conspires with an employee not to report (to avoid child support orders), the penalty can go as high as $500 per newly hired employee. States also can impose non-monetary civil penalties under state law.