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[Webinar] New Hire Reporting in California and Beyond

2014-02-18 10:00:00

 

Join the California Department of Child Support Services (DCSS) and ADP, who recognize the value employers provide to the Child Support and the New Hire Reporting Programs. Our webinar highlights some of the important roles and responsibilities of employers that help support family self-sufficiency.

Employers must report newly hired employees shortly after the date of hire to a designated state agency. Agencies match new hire reports against child support records, unemployment benefit and workers compensation information.

We will explore many of the responsibilities of employers in connection with new hire reporting within the state of California and with respect to multi-state reporting. Specific topics to be covered include why employers should report new hires, what information to report and how to do so, and how to update company information with the agencies. We’ll also review various resources that are available to you. The session will conclude with questions asked of both ADP and the California Department of Child Services.

Rick Bermudez
Manager of Employer Services Section, DCSS
Rick Bermudez has over 12 years’ Child Support Program knowledge and experience. He has worked for the Franchise Tax Board and the Department of Child Support Services providing leadership in the child support areas of enforcement, policy, and employer services. Rick currently manages the California Department of Child Support Services Employer Services Section.
Corrinne Flores
Manager, Government Relations, ADP, Inc.
Corrinne has been with ADP for over 18 years and currently manages the relationships and various applicable compliance requirements between ADP and agencies for child support, various types of garnishments, new hire reporting, and unemployment compensation benefits.

Kira Lakin:

Hello and welcome to today’s webinar, What Employers Should Know about New Hire Reporting in California and Beyond. Thanks so much for joining us here at ADP, as well as the California Department of Child Support Services. My name is Kira Lakin, Director of Marketing at ADP.

First, let’s review a few housekeeping items. This is one of a number of complementary webinars that ADP offers to tax, finance and HR professionals during the year. Today’s webinar will last for 60 minutes, ending at 2:00 PM Eastern time. I’d also like to mention that today’s webinar is being recorded and you’re currently in a listen only mode. If you’d like to download a PDF of today’s slides, you’ll see a link to do so in the chat window now. If you’re having any trouble, send a message into the chat window for assistance from our event producer.

Today’s webinar is also eligible for CPE or RCH credits for those who quality and certificates will be mailed to you via email within 30 days of today’s broadcast. During today’s presentation, we will ask for your feedback via a few polling questions, which will appear on the right-hand side of your screen once the poll has been opened. Please click on the radio button that corresponds to your answer to place your vote.

The last 10 minutes of today’s program have been reserved for Q&A so if you’d like to ask a question at any time during today’s webinar, simply type your question into the Q&A panel located in the lower right-hand corner of your screen and then click on the send button to send your question in to our queue. We’ll do our best to get to all questions before the end of the program.

We’ll also be launching a brief survey at the conclusion of today’s webinar, and please remember that to qualify for credits, each participant must be logged in on their own workstation, answer all polling questions and complete the survey.

Finally, once again, if during today’s webinar you experience any issues, please just enter a comment into the Q&A panel and our producer will respond.

So let’s get started. First off, if everyone could please just let us know whether they will be applying for credits, that’ll help us make sure you get a certificate after today’s session. We’ll give you just a minute here to go ahead and fill this out. If for some reason you change your mind after the session today, just drop us an email, we’ll work to get it all sorted out.

Great, thank you. So first I’d like to highlight just a few key facts about ADP. We have over 600,000 clients worldwide and we pay 1 out of every 6 employees in the US, which is just over 33 million. We’re one of four AAA rated US companies by S&P and Moody’s.

And with that, I’d like to introduce our speakers. Rick Bermudez and Corrinne Flores.

 

Rick Bermudez:

Well, good morning, good afternoon. Welcome to the California Department of Child Support Services employer webinar. My name is Rick Bermudez and I’m the manager for the Employer Services Section with the Department of Child Support Services.

I’ve been employed with the State of California for the past 25 years. For the past 12 years I’ve worked in the enforcement policy and employer services areas with the child support program. Welcome.

 

Corrinne Flores:

Good morning. My name is Corrie Flores and I’m the manager within the Agency Relations Organization at ADP. As for me, I have 18 years experience with ADP tax and financial services products, including the support for garnishments, new hire reporting, unemployment compensation management and healthcare.

My team actually manages the relationships between ADP and our state agencies and I’m also the chair of the American Payroll Association’s Child Support Committee, as well as a member of the Garnishment Workgroup. We present at Child Support Agency conferences, as well as at the American Payroll Association congress annually. And we are pleased to speak with you today in regards to new hire reporting.

 

Rick Bermudez:

Today’s topics include Reporting, Staying Connected, How Employers Help and a question and answer session at the end.

The California Department of Child Support Services recognizes the value employers provide to the child support program. As an employer, payroll or human resource professional, it can get confusing keeping up with all the roles and responsibilities related to child support.

Today’s webinar will connect all these requirements and how your roles and responsibilities support family self sufficiency. Cooperation between employers and the child support program improves the lives of children. We appreciate your cooperation and look forward to building a stronger partnership for the future.

How Employers Help. The Personal Responsibility and Work Opportunity Reconciliation Act, also known as PRWORA, required employers to report certain information on their newly hired employees to a designated state agency. States may establish more stringent reporting requirements and penalties may be imposed for failing to report new hires.

Child support agencies match new hire reports against national child support records to help execute child support related documents. Some states have passed independent contractor reporting requirements as well. Multi-state employers can elect to report all new hires to one state and this will be discussed in more detail later in this presentation.

 

Corrinne Flores:

So at a national level, employers are making a huge difference in the child support arena. This is data from the Federal Office of Child Support Enforcement, or OCSE, and they report that about 72% of all funds processed nationally for child support are done through an income wage withholding order through you as the employer. So you are contributing by far to the largest contributions to the child support community.

 

Rick Bermudez:

Through your efforts during 2012 and 2013, nearly 70% of child support collections resulted from wage withholdings processed by employers. This has resulted in over $1.5 billion for California’s children and families. DCSS and families thank you for your efforts.

 

Corrinne Flores:

Now let’s talk about some basics in reporting newly hired employees. ADP has been providing services to our employers to report their newly hired employees since 1996 as a standard part of their payroll product. Annually we report about 805,000 newly hired employees on every single month in the year of fiscal year ’13 on behalf of the employers that we represent. And we actually transmit the data to the various state agencies on a weekly basis.

At a national level, the National Directory of New Hires, or NDNH, reports that 30% of all child support cases involve parents who do not live in the same state as their children. So in certain situations it can be difficult to locate and send a child support obligation order to delinquent obligors. The federal government attributes tens of millions of dollars in collections just by the simple process of using the newly hired employee data.

And DNH reported in fiscal year ’13 about 55 million employees were reported on a national level. And likewise in fiscal year ’12, there was a bout 52 million newly hired employees reported and kept in that central database.

 

Rick Bermudez:

This chart provides statistics from data collected by the National Directory of New Hires. This graph shows in the third quarter of 2012 over 364,000 employers hired or re-hired over 3 million new employees. 125,000 or 34% of those employers reported their new hires. However, as you can see, nearly 66% of employers did not report their new hires. The statistics show that over 2 million new employees were not reported in the third quarter of 2012 just in California alone. The more new hires reported, the more child support program increases collections for the children and families.

DCSS and EDD, the Employment Development Department, are working organizations like you to provide resources and answer questions that will increase the percentage of employees that are reported each year.

 

Corrinne Flores:

Now let’s look at some basic information when we talk about the new hire program. So the definition of employer for new hire purposes is the same as the definition provided by the IRS, the Internal Revenue Code of 1986 for federal income tax purposes and includes any governmental entity or labor organization.

At a minimum, in any case where an employer’s required to have an employee complete a W-4 form, the employee then must be reported as a new hire and the employer obligation is there to report that newly hired employee.

Date of hire. Date of hire is considered to be the actual day the individual first performed services for wages. So not necessarily the first day they’re entered into the payroll system, but the day they actually performed services that would in fact allow them to be paid.

The basic definition of the newly hired employee defines it as an employee who has not previously been employed by the employer or was previously employed by the employer but has been separated from such employment currently 60 days. So that’s some of the basic information as far as definition. And the basic data reporting requirements that were imposed is at an employer level federally the requirement is to provide the federal employer identification number, the employer’s business name, the address as well as the employee’s full name, Social Security number, address and date of hire.

However, some states, as you will hear this presentation, have some additional requirements that they need for their state new hire reporting process.

 

Kira Lakin:

Great. So let’s just take a moment here to do our first polling question. Can a multistate employer report all their new hires to a single state? All of our attendees should see the poll question pop up on the right-hand side with the options. And the possible responses are A, no, all new hires must be reported to the state in which they work. B, yes, the employer can select which state, and then advise the federal government accordingly. Or C, neither of the above. So we’ll give people just about 30 seconds to get their answers in there.

And Rick, while we are waiting for folks to get their responses in, maybe you can just do a quick recap for us on the importance of new hire reporting.

 

Rick Bermudez:

Yes. New hire reporting is the mechanism that we use to locate, establish and enforce child support cases on a day-to-day basis. The timeliness of that reporting is something that’s required in order to be effective in the child-support program.

 

Kira Lakin:

Yes, it definitely makes sense. So we’ll go ahead and close the poll out and then we’ll move on.

 

Corrinne Flores:

So this slide shows and end to end process for new hire reporting. It really does start with you as the employer. So you hire a new employee, the employee is entered into your payroll system and you have X amount of days to send that data to your state new hire reporting agency. Once the state new hire reporting agency gets the information and processes it through their system, they typically have 48 hours to then pass that information on to the National Directory of New Hires.

Then that allows other states to access that national directory and attempt to located delinquent obligors. And then ultimately, you as the employer then again it comes full circle back and you begin to receive child support obligations and orders based on the newly hired data that was reported.

 

Rick Bermudez:

Okay. A little more on reporting multi-state employees. Employers hiring employees in more than one state have the option to report all newly hired employees electronically to one state in which they have employees. Multi-state employers who choose to file to one state must notify the Federal Department of Health and Human Services Office of Child Support Enforcement. OCSE can be cont acted by phone or email at the number and email on the screen.

After registering with the Office of Child Support Enforcement, you can just go to the link provided on the form each time you have an employer, a new employer to report and enter their information. The form provides you with two options. Option one is to send the new hire reports to the State Directory of New Hires of the state in which each newly hired employee works. Or option two, to designate one state in which any employee works and transmit all new hire reports to the State Directory of New Hires of that state. Again, you must notify the secretary of the United States Department of Health and Human Services in writing of your choice to report to only one state and identify that chosen state.

 

Corrinne Flores:

Now let’s talk about penalty provisions. There are definitely penalty provisions that both federal and state law allows for employers to be penalized if they’re failing to report their newly hired employees. At a federal level, the law mandates that a state can impose a penalty on employers for failure to report, but it may not exceed $25 per newly hired employee.

If it is found that there is conspiracy between the employer and the employee to not report that employee as newly hired, the penalty may not exceed $500 per newly hired employee.

States may also impose both monetary and non-monetary civil penalties based on their state law for non-compliance. And now Rick’s going to talk about California and their penalty provision.

 

Rick Bermudez:

And California does indeed have a penalty provision. The California Unemployment and Insurance Code provides that penalties may be assessed on an employer for failing to report new hired employees. The fine may be $24 for each employee not reported and if the failure is intentional, the employer may be fined $490 per employee not reported.

 

Corrinne Flores:

So as Rick discussed, California has a lesser penalty than the federal law mandate allowed, but they cannot exceed what the federal mandate has. So how are the new hire reporting agencies identifying non-compliance? They actually do a comparison of your quarterly wage report to the newly hired reports that were sent in previously. So they take those two reports, they compare them and they’re able to identify failures in reporting. Based on that, notices can be sent to the employer to advise them that penalties may be imposed.

 

Rick Bermudez:

Okay. Some more information on new hire reporting and independent contractor reporting. An employer must report newly hired employees within 20 days of their start date to work to the Employment Development Department. Independent contractors must be reported within 20 days of contracting if the contractor receives a 1099 for the services, is paid $600 or more, is working as an individual or sole proprietor. The reporting of newly hired employees and contractors is shared with the OCSE National Directories and Registries to assist in locating, establishing and enforcing child support cases globally. Report your new hires electronically with EDD by visiting the website address on the slide.

Re-hired employees. On October 21, 2011, President Obama signed the Trade Adjustment Assistance Extension Act of 2011, which amends the Social Security Act effective April 21, 2012. The law defines a newly hired employee as an employee who has not previously been employed by the employer or was previously employed by the employer but has been separated from such prior employment for at least 60 consecutive days. If the employee returns to work after a layoff or a leave of absence and is required to complete a new IRS employee’s withholding allowance certificate, Form W-4, the employee must be reported. If the returning employee was not formally terminated or removed from payroll records, you do not need to report the employee as a new employee.

Electronic submission. The Employee Development Department electronic filing guide for new employee registry program, the DE-340, provides instructions on how to report your new hired employees electronically. EDD can also assist in setting up your processes by contacting their NER and ICR e-processing unit. Email, telephone, address and fax contacts are all included within the slide.

 

Rick Bermudez:

This screen shot provides additional information, including the online tutorial for conducting business with EDD electronically. If you don’t currently use the EDD e-services services, I encourage you to give it a try. Once you make the change you will never go back to paper. To learn more, you can register and access the tutorials through the EDD website, then the payroll taxes page and e-services link. The web address is also included on the slide.

Reporting terminated employees. The importance of reporting terminated employees includes it can potentially provide a notice of a new employer and address if known on where to send the income withholding order on the employee. And it can possibly locate a new or the last known address for the employee should the employee have moved. The income withholding order includes a termination notice that can be completed and sent to the local child support agency. And if you’re an e-IWO employer and you receive your income withholder orders electronically, terminations can be reported through the e-IWO process also.

And please remember that employees are not to be disciplined or terminated for having an incoming withholding order. Collecting child support through wage withholding is the manner prescribed within the law.

So just a reporting new hire overview. How is new hire information used? The Federal Office of Child Support Enforcement and California match new hire reports against child support records to locate parents who owe child support. The matching process is especially helpful in interstate cases, which can be the most difficult cases to resolve in which a parent and a child live in different states.

And why new hire and not quarterly wage? Quarterly wage data is often outdated when the child support office receives it. There can be as much as a six-month lag time between the time the data is submitted and when it is available to the child support office. With new hire reporting, data is often available within a significantly shorter amount of time. When data is more current, non-custodial parents can be located more quickly, allowing child support orders to be established and/or enforced more quickly.

So what does the child support program do with new hire information? The information is matched against other state new hire data and the federal case registry where there are matches by employee name, Social Security number and employment. The Federal Office of Child Support Enforcement notifies other states who then take actions based on the new hire data. The date is not exclusively used by California, it’s used across the nation and even globally.

The information assists in locating parents, establishing orders for support and provides the ability to verify earnings used to ascertain accurate financial information. In addition, EDD conducts matches between its own new hire database and other states programs to prevent unlawful or erroneous unemployment benefit payments. The information is also used to prevent unlawful receipt of public assistance, including welfare, food stamps and Medicaid payments.

A reminder on where and how to report to EDD. The DE-34, the new hire employee reporting, the DE-542, the independent contractor reporting and the DE-9, the quarterly wage and withholding reporting can be completed by mail, fax and by using the EDD e-services or business processes.

 

Corrinne Flores:

So as Rick mentioned, there’s a variety of ways to send the new hire reports. So the new hire information should be sent to the state directory of new hires within the state where the employee works. At a federal level, they allowed for three methods to submit the new hire information, mail, magnetic tape at the time or electronically. Many states, as California has done, have created very slick websites. You can fax in the information, you can email or phone it in, or as I mentioned the website transmission. If you have any questions, look at your state new hire information to determine the best way in which you can send the information to them and instructions on how to do so.

And as Rick mentioned, why if the state and the national directory looks at my quarterly wage information as an employer, why can’t they just use that to get new hired information? But as Rick went over, the information from the quarterly reports is often outdated and there is such a lag time. So in order to get the delinquent child support obligation enforced quickly, that’s why the new hire reporting process is so critical into the success of the child support program.

 

Kira Lakin:

That brings us to our second polling question. So how does the Trade Adjustment Assistance Extension Act of 2011 define a newly hired or re-hired employee? An employee who has not previously been employed by the employer, or was previously employed but has been separated from such prior employment for at least — and the responses are A, 30 consecutive days. B, 60 consecutive days. And C, 90 consecutive days. So once again we’ll just give everyone just under a minute to get their responses in. And just a quick reminder that if you are looking for credit you will need to respond to all the polling questions, as well as complete the survey at the conclusion of today’s webinar.

All right, let’s go ahead and move on.

 

Rick Bermudez:

Okay. This diagram provides the process between EDD, the State Directory of New Hire interfaces, with the federal systems. Data is matched against all program participants, the federal case registry, and employment earning information, which is returned to states with active cases. The CSE system processes and evaluates the data received against the existing data with NCSE.

The CSE is the Child Support Enforcement system and this is a system that every state within the country uses to operate their child support program and enforce on their cases. And I just want to talk a little bit in the next few slides on the impacts that reporting has on the CSE systems as information comes in.

So the next three slides are going to provide examples of how inconsistent reporting impacts employer data within the CSE systems. In this particular example, there’s two reportings that were done. One reporting came in with a federal employer identification number and one reporting did not. And the federal employer identification number for CSE systems, it’s used the same way that I imagine the Social Security number is used for payroll systems. It really is the key identifier.

So we have one employer — these are one in the same employer at the same address, but one came in with a federal ID number and one came in without a federal ID number. And then the zip codes on the two are also different. And these minor differences in reporting cause CSE systems to actually add an additional employer into their large repository of employers within their CSE system. Go ahead and go to the next slide.

Again, this is another employer that came in and the discrepancy on this particular reporting, as minor as it was, was just the federal employer identification number. There were two numbers that were — the 6 and 8 on the two were different and this minor error in reporting caused our CSE system to add the Gloria Farms, Inc twice into our CSE system.

And the impacts from remiss duplicate employer into our system is it can create duplicate income withholding orders to employers. You as an employer have probably seen duplicate orders or duplicate notices coming to you across your desk and wonder why that is. A lot of times it starts with the inconsistencies that we sometimes receive from the employer reporting. Next slide.

And our last example, again we have the same employer, Green Hospital System. Two of the addresses are the same, one is different. One has a suite number. The zip codes are a little different. Two came in with federal employer identification numbers and one did not. And again, this information, it just creates for duplicate documents to move out of the CSE system and generated to employers.

This slide demonstrates how inconsistent and bad data and the physical attributes from our interfaces with the State Directory of New Hires and our federal systems can create duplicate records and result in misdirection or the delayed delivery of child support documents, including income withholding orders, national medical support notices and employment verifications. Next slide.

Okay, the next few slides we’re going to just go over some of the different areas of reporting that are on the different reporting forms for the Employment Development Department. And this is the new hire reporting document that is used by EDD to report new hires. And as you can see, the highlighted field, the business name. What’s important there is to actually put the legal business name there. That’s the business name that Child Support uses in executing child support notices. And then the lower area has the demographics for the participant itself.

The next document is the reporting for independent contractors. Again, we have the federal ID number, which is important, as well as listing the service recipient, whether it’s an individual or a business, to put that in there and to report that on a consistent basis to eliminate any duplication. Next slide.

This particular slide is the employee’s withholding allowance certificate. And this particular form is used to provide the amount of withholding allowed for a given employee. And how this is filled out can actually impact the amount of resources that are available to attach with an income withholding order. Next slide.

And this is the quarterly form that’s used. And this particular form provides information, not only in regards to where the employee works, but also how much the employee makes. It’s probably the form that provides us the most detail in regard to how much an employee earns in any given period of time. And this is very important for child support in the establishment and enforcement areas of the program.

This is the federal W-4 form, very similar to the state form that provides the allowable deductions that an employee can claim when they’re having their withholding taken.

Again, the reporting cause and effect. This slide illustrates how consistent data reporting improves service delivery, whether locating participants, their employers, establishing orders and enforcing orders. Information reported starts at the employer level and passes on to the State Directory of New Hires and into the Office of Child Support Enforcement processes and ultimately to each state’s CSE system. So consistent reporting is very important in being able to get to our mission of establishing, enforcing and locating in the child support program.

So the next slide is a screen shot of the employer information request form and maintaining accurate employer information within the Department of Child Support Services. It benefits employers by ensuring that notices are sent to the proper location and preventing issuance of duplicate notices. This form is sent out to employers to validate the employer’s demographics. Some of you online may have even received these from our department. Information provided on the employer information request form will be used to assist in issuing wage withholding orders, medical support notices and employment verifications to appropriate addresses and individuals.

The information requested on the form includes the employer — federal employer identification number, the legal name versus the business name, the address that the employer wants the Department of Child Support Services to use for mailing forms, your contact name and phone number for the employer. Information from the form is utilized to update our data repository and keep CSE data updated and accurate.

As far as providing that information to us, there’s two ways that you can do that. You can call at the phone number there, 888-898-1743, or you can go online on the link provided and you could submit the information online in an electronic process.

 

Kira Lakin:

Thanks, Rick. That was a lot of really information for our attendees today. And I know you’ve given a lot of tips on how to keep the information accurate and avoid erroneous or duplicate entries. And so this question’s going to be a little bit tough, but let’s see who was paying attention. Errors and omissions can cause inaccurate, duplicitous or unconfirmed records in the CSE system. How many unconfirmed records currently exist? The possible responses are A, 500,000. B, 1 million. Or C, 2.5 million. Those are some pretty big numbers. Okay, we’ll just keep it open for another few seconds here and then we’ll move on to our last section.

Okay, let’s move to Staying Connected.

 

Rick Bermudez:

Okay. Go ahead and go to the decks. Okay. So staying connected with the child support program is really not too difficult. There’s a lot of resources available to stay connected with the child support program. With EDD new hire reporting, we’ve provided a link on how to gather more information on new hire reporting. The Department of Child Support Services has an employer subscription and if you go to that hyperlink you can register to receive our newsletters. The DCSS employer resource center provides valuable information on different areas of child support and how to navigate through the different areas. And e-services for business information is on the EDD website and that’s where you go to conduct business with EDD in an electronic process.

This screen shot provides a screen shot of the DCSS employer resource center. And this is an effort that we conducted approximately nine months ago to enhance how we communicate with the employer community. The resource center provides tabs at the top that has different subject matters from payments to new hires, medical support, income withholding. There’s a hyper link that provides valuable information if you choose to receive your income withholding orders electronically. Over to the lower left there’s information on upcoming employer events and you can go on there to find out if DCSS is participating on any new employer webinar, such as the one today, as well as any local events that we may be actually going and providing live presentations to in partnership with one of our local offices.

Okay. The role of the employers. In summary, employers contribute to the success of the Child Support Program by reporting new hires within 20 days, being consistent when reporting the federal employer identification number and the company legal name on all forms submitted, complying with income withholding orders and medical support obligations. And just remember that DCSS is here to help and staying connected by subscribing to our employer newsletter through our Listserve will assist in that effort.

The role of employers. So staying connected to the Department of Child Support Services through our different areas of information will assist in being able to help support the Child Support Program. File your new hire reports online in a consistent and timely manner and consistently report the (inaudible) in the company’s legal name.

And if you still have questions, visit the Employer Resource Center for more information or call the number on the screen for general questions.

 

Corrinne Flores:

And if you still have questions or if you are a multi-state employer and you have questions and you are reporting new hires to not just California, but other states as well, you can always access the Federal Office of Child Support information and they have a complete matrix of all the state new hire contacts as well as the state new hire website information. And both of those link addresses are listed there. It’s a very useful site, it’s user friendly and very geared towards the employer community and questions that you may have. So these are two great assets and resources that you may be able to access.

 

Kira Lakin:

Thanks so much, Corrie and Rick. With that, let’s go ahead and move into our Q&A section. We covered a lot of great material, so we want to give folks the chance to ask questions of both of you. Let me go ahead and just jump right in here. Again, just a reminder to all of our attendees, if you have questions, please do submit them through the Q&A tab on the right-hand side of your screen. And for anyone that we don’t get to during today’s session we will be following up to make sure that you get the answers that you need.

So first question. This one is for you Corrie. How can I check to see if all my employees were included in the national registry?

 

Corrinne Flores:

So if you’re an employer that’s utilizing ADP we actually produce a report that shows all the information of the employees that we’ve reported on your behalf. If you are not an employer using a service provider, and I would assume that all service providers would be able to provide that report to their clients as well. But if not, you can always check either with your state directory or if it is a national level, check with the National Directory of New Hires.

 

Kira Lakin:

Great, thanks. Next question is over to you, Rick. What if an employee changes their last name? Must I report that? And how would they do so?

 

Rick Bermudez:

Yes. If an employee has changed their name, I would report the — continue to use the same Social Security number, but report the new name that they’ve gone to. We have a system that maintains a multitude of names as people do change names through the course of life.

 

Kira Lakin:

Okay, that’s very helpful. Thank you. We’ve got another question here. Can quarterly wage reporting also be reported to one state to be shared with other states?

 

Rick Bermudez:

Okay, and that’s a question for me. And that reporting quarterly wage needs to be reported to EDD. EDD does share it with the Federal Office of Child Support Enforcement, but quarterly wage has to be done at the state level.

 

Kira Lakin:

Okay. Corrie, I’ve got one for you and this is actually specific to ADP. So as an ADP multi-stake client, does ADP report new hires to all states or do they report all new hires through one of the states in which we employ?

 

Corrinne Flores:

Great question. We actually report to each and every individual state directory. As a service provider, because we have a presence representing our clients in each and every state, we do send to each and every state directory. It is not — the one reporting is not available to service providers, so because we, as I mentioned, have a presence and our clients have a presence we do report individually on a state level.

 

Kira Lakin:

Great. And let me follow on with that one. Do you need to report resigned employees in general or only if they have a child support wage garnishment?

 

Corrinne Flores:

Is that a question for me or for Rick?

 

Kira Lakin:

That may actually be for Rick. And by resign, I’m assuming we may be referring to terminated employees who are willfully terminated.

 

Rick Bermudez:

Yes. Any termination that has a child support income withholding order linked to we want to know about that termination so that we can move on and pursue our enforcement of that child support order with potentially a new employer.

 

Corrinne Flores:

And I would say, if I could just add on, from a national level I would say it’s always in — obviously if there is a child support obligation it is in the best interest for all involved to report the termination. If there is not, I would say look at your state website to determine.

 

Kira Lakin:

Okay. Now if there’s a change in pay for the employee, does that need to be reported as well? I’m guessing that has ramifications on both the federal and the state level.

 

Rick Bermudez:

Yes. We see that through our quarterly wage reporting if someone has gotten a raise and is earning more. Sometimes we see it if a person’s taken a second job. And no special reporting is needed, but the quarterly wage reporting will provide us with the information we need to potentially modify an existing order.

 

Corrinne Flores:

And I would agree at a national level across states as well. Not necessarily if there was just a change in pay, because that may, as Rick mentioned, be reported in the quarterly wages but nothing in the new hire. So no need to re-report.

 

Kira Lakin:

Okay. Well, along that vein there’s a question here that actually is probably worthy of a little bit of discussion. And the question came in as if we never reported contractors — independent contractors, must we report past ones as well or just the ones that we currently have employed? So I think that as we think about that, it does also beg the question what should employers do if they know of employees who were hired and then have since left the company but were never reported in the first place?

 

Rick Bermudez:

Are we referring to — is this an independent contractor question?

 

Kira Lakin:

Yes.

 

Rick Bermudez:

Yes. With an independent contractor if they haven’t — if you didn’t report them, you forgot or you didn’t know that you were supposed to, quite frankly it’s not going to provide our program much good to know that 18 months ago they contracted with your company for services. They’re done working there, there’s nothing that we’re going to be able to do to use that information to enforce a child support order. It’s very important — that’s why it’s so important to report these in a timely manner.

 

Kira Lakin:

Okay. So we have another question here about an employee who was terminated in October and should I submit a notice of termination now? It seems like that’s along a similar thought.

 

Rick Bermudez:

Yes, absolutely. Terminations should — they need to be reported, even if there’s a little lag time between when it happened. We need to update our child support systems to reflect that they’re no longer working there. If we don’t know that they’re not — have been terminated, we may think that the employer’s just stopped remitting and withholding on the employee.

 

Corrinne Flores:

And I would say if there is a question to report or not, go ahead and give your state new hire reporting agency a call. They’re always very willing to assist you with the process since they do want to make it as easy and beneficial to all involved. So I would say if you have a question and aren’t particularly 100% sure one way or the other, reach out to them and they’ve always been very helpful.

 

Kira Lakin:

That’s great to know, Corrie. I’ve got another question for you. What if part of the year an employee was relocated from one state to another? Does an employer need to report it as a new hire for the new state where the employee moved?

 

Corrinne Flores:

I would say no because the information has already been reported to the national directory. And so what we usually use as a best practice and it’s kind of a guideline to fall back to. If the employee is filling out an additional W-4, then they should be re-reported. If they’re not and just relocating, there generally is not a need. But again, if there was a question in regards to it, I would say reach out to that particular state. But if it’s just a relocation, I would say no.

 

Rick Bermudez:

Yes, and if I could just chime in on that, the only time that it may change is we see where a large multi-state employer may actually operate under different federal employer identification numbers. And in that instance, if a new reporting isn’t done, we’re not going to find out for some time that now they’re operating under another part of the entity and whether the income withholding order continues or not is somewhat of a challenge.

 

Kira Lakin:

Yes, that definitely makes sense. Maybe you can just reiterate for us, Rick. We have a question here. Do we only report to Child Support Services or is there somewhere we are to report terminations and/or name changes?

 

Rick Bermudez:

Well, there’s reporting through the income withholding order. One of the pages on the income withholding order provides for sharing terminations with the local child support agency. And then if you’re an e-IWO employer, you can actually report through e-IWO and that actually goes through the federal portal and then is shared with the states that need to know that.

 

Kira Lakin:

Great. Corrie, I’ve got a question here about the ADP service, another question. If a client is signed on for ADP’s new hire service, do they need to take any separate steps to ensure that all that reporting is taking place or is that automatically done?

 

Corrinne Flores:

It should be part of your service that you’re already provided in payroll. But if you had a question I would say to reach out to your ADP representative, the one that you most often speak to in regards to payroll questions, because they should be able to answer that. But we do provide a recap that the employers receive on a, I believe, monthly basis that shows the employees that we have reported on their behalf.

 

Kira Lakin:

That’s great to know. We’ve actually got a couple of questions about that as well. So the response there is that there is a monthly report that goes to all of the folks who are signed on for ADP’s new hire reporting service where you can see all the employees who have been reported.

 

Corrinne Flores:

And just to tag on, Kira, they would get — it’s called the New Hire Compliance Report. And it’s actually provided back to them in their preferred method on a per payroll process.

 

Kira Lakin:

Great. I think we have time for just a couple more here. We’re running up against the end of the hour. So Corrie, can you give us just a little bit of perspective on what you see as far as California versus other states processes? You’ve mentioned that other states may have differing requirements. Anything that you want to add there as far as what folks may just want to know?

 

Corrinne Flores:

I can tell you in regards to penalties we generally don’t see a lot in the way of penalties because I think the new hire reporting agencies, as well as the child support agencies, really understand the benefit that employers are making. And so they’re not there to make it more difficult, but to assist. And so if it’s a situation in which the employer just does not know what to report or how to report, they’re often usually very willing to work with them. They send a notice saying we see that you failed to report and if you reach out to them they will help you.

However, we do see that Utah has in fact been sending out penalties and so if you are receiving notices for failure to report, I would say definitely comply with that notice, send the information in or reach out to the agency if you’re having problems and need them to assist you and walk you through it. But there are states that do in fact impose penalties.

 

Kira Lakin:

Great. Rick, you went through quite a few different ways that employers can report information to the agency. Is there any preference as far as what method is used? Are certain methods more effective than others, for example?

 

Rick Bermudez:

Well, with the Employment Development Department I think their preferred method is electronically. It gets processed faster, it gets — they’re able to share it in a quicker timeframe with the Office of Child Support Enforcement. Doing it by paper requires staff resources to key the information to get it into electronic format to process. So the electronic format is the preferred method.

 

Corrinne Flores:

And Kira, I would say that’s consistent across states. Most states have an electronic file method available and obviously to Rick’s point, if it’s sent in electronically it actually does not need to be touched or manipulated in any way. It goes right into the state system and then within that 48-hour timeframe goes directly to the national directory without any touching or opening of information. So electronically is always the preferred method I think across states.

 

Kira Lakin:

And that’s great to know. So that about wraps up our Q&A session here. Before we go into our final slides, is there anything that either of you would like to add on for our attendees today?

 

Corrinne Flores:

We just appreciate the time.

 

Rick Bermudez:

Yes, and thanks to all of payroll professionals for the work they do in supporting our program.

 

Kira Lakin:

Great. So for a little bit more information about ADP I’ve listed here different ways that you can get in contact with us. And also be sure to visit our blog, ADPcomplianceinsights.com. We do archive past webinars, such as this one, which will be posted up there in under a week. So if anyone needs to refer back to it, it’ll be there for your reference.

We also list all upcoming sessions so you can register for those and post regular updates on topics that we think may be important to you. We do really appreciate your feedback on how we’re doing, so please tell us how these programs can be even more helpful for you as you fill out today’s post event survey.

So once again, thank you so much for joining us and have a great day.

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