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The Complete Payroll Blog

Setting Up New Hire Reporting for Your First Employee

Posted by Complete Payroll | Feb 25, 2019 7:00:00 AM

Setting Up New Hire Reporting for Your First Employee - Complete Payroll

New Hire Reporting is a federally mandated task that is accomplished on a state-by-state basis. In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) laid the groundwork for reporting, and every employer is required to report. That includes public, private, government, and non-profit employers. Although PRWORA does not require employers to report independent contractors; however, some states do, and you should check the state where you are hiring to confirm.

PRWORA requires new hire reporting in order to do the following:

  • Ensure compliance with child support rulings

  • Locate non-custodial parents who may owe child support

  • Prevent unemployment insurance fraud

  • Stop unlawful access to welfare assistance

  • Prevent false workers’ compensation claims

Because this system is dependent on state-by-state compliance, employers who hire in multiple states will need to familiarize themselves with each state’s reporting procedures. The good news is that the process is usually pretty consistent across state lines. You already have to report for every single employee, so the burden of adjusting depending on the state of employment is not overwhelming.

Accurately reporting your new hires in a timely manner will ensure that you avoid penalties and fines. Neglecting to turn in a new hire report could cost you $25 per employee, but if you routinely skip this requirement or are found to be conspiring with employees to avoid reporting, you could be charged up to $500 per employee and face additional non-monetary civil penalties.

Step One: Collect All Required Information

You will need to collect some information from your new hire and provide some information yourself.

From the employee:

  • Full name

  • Address

  • Social Security number

From you, the employer:

  • Name

  • Address

  • Federal Employer Identification Number (EIN)

  • Date that employment began

Step Two: Submit via State-Approved Forms

This is one of the things that varies from state to state. Many employers are permitted to take the information from the employee’s W-4 and use that in the New Hire Reporting, but some states do require an additional form.  Forms can generally be submitted by mail, email, fax, or through an online portal. Most employers package new hire reporting with their filing of W-4 (tax withholding) and I-9 (worker eligibility) forms.

Step Three: Submit on Time.

According to the Office of Child Support Enforcement, which manages PRWORA: “Federal law mandates that New Hires be reported within 20 days of the date of hire. However, states are given the option of establishing reporting time frames that may be shorter than 20 days. You must adhere to the reporting time frame of the state to which you report. Be sure to check with your state New Hire contact to learn your state's requirements.”

You can find out more information about PRWORA through the office of Child Support Enforcement’s useful Q&A page.

What else do you need to know about hiring your first employee?

We have created an informative and practical guide for small businesses who are hiring employees for the first time. We invite you to take a look and get information about all sorts of hiring issues, from worker classification and payroll to interviewing and timekeeping software. Have questions? We’ve got answers. Click here to contact us today.

Topics: Taxes, Employees, Payroll

Learn more about new hire reporting with our guide to hiring and paying your first employee.

Written by Complete Payroll

We do payroll, HR, timekeeping and more for employers all over the country from a small, rural town in Upstate New York. And we're constantly publishing articles and other resources to help business owners, HR managers or anyone that helps manage a workforce. Welcome to Payroll Country!

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The materials and information available at this website and included in this blog are for informational purposes only, are not intended for the purpose of providing legal advice, and may not be relied upon as legal advice.  The employees of Complete Payroll are not licensed attorneys. This information and all of the information contained on this website are provided pursuant to and in compliance with federal and state statutes. It does not encompass other regulations that may exist, including, but not limited to, local ordinances. Complete Payroll makes no representations as to the accuracy, completeness, currentness, suitability, or validity of the information on this website and does not adopt any information contained on this website as its own. All information is provided on an as-is basis.  Please consult an attorney to obtain advice with respect to any particular question or issue.