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Three Tips for New Hire Reporting – And Why It Matters

Beach_Mom_WalkingKeeping current on New Hire Reporting may potentially help save employers from incurring significant noncompliance penalties. Failure to report a new hire can result in federal fines as much as $25 per employee, or as high as $500 if the failure to report is intentional. States may also charge non-monetary civil penalties.

Despite the risks involved, the National Directory of New Hires reported that, in California for example, 66 percent of employers did not report their new hires in the third quarter of 20121. That’s more than 2 million new employees who were not reported, opening those employers up to the risk of being fined.

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 is a federal law that requires employers to report on their newly hired employees to designated state agencies. These agencies use new hire information to establish child support orders, assist in locating parents and prevent the unlawful receipt of welfare, food stamps and Medicaid payments. The federal government attributes tens of millions of dollars in collections to the use of new hire data2.

As an employer, complying with New Hire Reporting laws is about more than just avoiding fines.

Reporting Tips

Federal law identifies three methods for submitting new hire information: first class mail, magnetic tapes, or electronically. States offer additional options including fax, email, phone and online submissions3. When submitting, remember these tips:

  • Report new hires twice monthly if using electronic methods; otherwise, within 20 days of their hire date
  • Be consistent when reporting your company’s Federal Employer Identification Number and legal name on all forms
  • Comply with the income withholding order and medical support obligations in your state

To learn more about your company’s obligations to report new hires – and how to do so – view the recent ADP webinar, “New Hire Reporting in California and Beyond.” Or, to help keep up with each state’s reporting requirements for new employees, access ADP’s online database of state-specific agency contacts.

 

1 Source: California Employment Development Department
2 http://www.acf.hhs.gov/programs/css/resource/new-hire-reporting-answers-to-employer-questions
3 http://www.acf.hhs.gov/programs/css/resource/national-directory-of-new-hires-state-directory-of-new-hires-prwora


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