New Hire Reporting Requirements
When a new employee is hired, there are federal and state reporting requirements that must be followed. This new hire information serves several purposes: it is used for the establishment or enforcement of child support orders, and can help detect and/or prevent wrongful benefit payments, such as unemployment payments or public assistance such as welfare, food stamps or Medicaid.
A new hire is defined as an individual who has not been previously employed by the employer, or, if they have been previously employed by the employer, they have been separated from their employment for at least 60 days. On the federal level, you have 20 days to report a new employee, but be aware that some states may have shorter time frames. If within the 20 days, the new hire separates from their employment, the new hire information must still be submitted.
The information that is required to be reported is similar to what is found on the new employee’s W-4, so there is not much of an additional burden placed upon the employer.
Social Security Number
Employee Date of Birth
Payroll address if different from the work address
FEIN, Federal Employer Identification number
The federal government does not require reporting for Independent Contractors, but, as stated above, individual state requirements can vary. New Jersey is one state where new hire information for Independent Contractors needs to be reported but it is not required in Pennsylvania and New York.
This information can be submitted various ways. Oftentimes, reporting is a function built into the payroll software you are using. Be it automatic or a manual push, the most expedient way would be electronically. Submission information and guidelines can be found on the following states websites:
Pennsylvania CareerLink, Commonwealth Workforce Development System
New York State Department of Taxation and Finance
Typically, whoever handles your payroll should be responsible for reporting new hires. No business is exempt from reporting this information and penalties can be assessed if it is not done. Under federal law, the state can fine up to $25 per unreported employee. If there is found to be a conspiracy between the employer and employee to avoid the required reporting, the state can fine you up to $500 per employee. In addition, there can also be other, non-monetary civil penalties that can be imposed if the employer is in noncompliance with reporting requirements.