New Hire Reporting

Employers are required to report information about their newly hired and rehired employees to the appropriate state agency within 20 days of the date of hire. (This is per federal regulations. States may establish more stringent reporting requirements.)

The New Hire Reporting regulations were passed as part of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 to help enforce child support rulings and reduce welfare payments. States can use the new hire reports to match against child support records to locate parents, establish an order, or enforce existing orders.

State agencies will also be able to use the new hire information to find and prevent fraudulent workers' compensation and unemployment claims.

New hire must contain the employee’s name, address, social security number, and date of hire. They must also include the name, address, and federal identification number of the employer. (Again, states may request additional information and faster compliance.)

To comply, employers may file a Form W-4 or an equivalent form created by the employer. Penalties for non-compliance can be up to $25 per employee, and up to $500 per employee in the case of a conspiracy between employer and employee.

New hire reports can be sent by first class mail, by magnetic media, or electronically. Businesses with employees in multiple states may select a single state (in which the employer has employees) to report all new hires.

In this case, reporting must be done by magnetic tape or electronically. Failure to transmit the reports within the deadline will result in a penalty, which varies by state.