Payroll insight
Billy Meyerkorth CPP, manager of human resource operations at Cetera Financial Group, explains what is required N ew hire reporting began in 1997 to assist with the collection of child support and quickly spread to comply up to a maximum of $500 if a conspiracy between the employer and employee is found. New hire reporting in the USA
...each state may have different requirements, but they cannot be longer than the federal requirements hires magnetically or electronically, it may choose to designate one state in which it has employees as the state to which it will report all of its new hires. The easiest approach would be to report to the state that has the fewest pieces of required information. Generally speaking, employers must report newly hired employees within twenty calendar days from the hire date. If reporting magnetically or electronically, two transmissions per calendar month that are twelve to sixteen days apart are required. Keep in mind that each state may have different requirements, but they cannot be longer than the federal requirements. The format or method that may be used can vary. Employers can report new hires simply on the employee’s Form W-4 or an equivalent form containing the information that is required. The report can be mailed by first class mail, or delivered via fax, magnetically or electronically. Keep in mind that the Form W-4 does not contain all required pieces of information such as the hire date. If using the Form W-4, be sure to use a copy of the form so that additional information can be written on the form. Of course, penalties for failure to file exist. The states have the option to set civil penalties of up to $25 for a failure
to assist with preventing abuse and fraud in the unemployment system, workers’ compensation programs, and public assistance programs. Payroll professionals have assumed this responsibility for years. Under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, employers were required to comply with the federal new hire reporting requirements, and states were required to pass laws including those provisions. Each state has laws mandating new hire reporting and setting out the appropriate reporting procedures. All employers are required to provide to the State Directory of New Hire Reporting several pieces of information. At a minimum, based on federal new hire reporting, employers are required to report the employee’s name, address and social security number. In addition, the employer is also required to report the employer’s name, address and federal employer identification number along with the date that the employee first performed services for pay. Since each state has its own laws mandating the reporting, some states require additional information beyond the federal requirements. A newly hired employee can be an employee who is a brand new hire to the employer or a rehire. A rehire under the Claims Resolution Act of 2010 includes an employee who previously was employed by the employer but left and was rehired sixty days or more after being separated. Employers with employees in one state must report newly hired employees to that state via paper, magnetically or electronically. If an employer is a multistate employer and reports new
States have five business days to provide the information to the State Directory of New Hires database and two business days from the entry date to actually transmit a child support withholding order, if applicable. The state then has three business days to furnish the information to the National Directory of New Hires. n This article was published in the August/ September 2015 issue of the American Payroll Association’s PayTech magazine. The American Payroll Association (APA), www.americanpayroll.org, is the USA’s leader in payroll education, publications, and training. This nonprofit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more than 23,000 members, APA is the industry’s highly respected and collective voice in Washington, D.C. The Global Payroll Management Institute (GPMI), www.GPMInstitute. com, spearheads the APA’s global initiatives to provide the world with a leading community of payroll leaders, managers, practitioners, researchers, and technology experts. Subscribers connect with each other through networking discussions, collaborative opportunities, and access to education and publications dedicated to global payroll strategies, knowledge, research, employment, and training. GPMI also publishes several global payroll texts and white papers as a benefit to subscribers.
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Issue 23 | September 2016
| Professional in Payroll, Pensions and Reward |
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