When you’ve finally found the perfect new employee for your business, it’s time to get that person onboarded — and part of the onboarding process is reporting every new hire.
Essentially, the government needs some basic information about everyone who joins your team. Here’s what employers need to know about how, when, and why they should be reporting new hires.
What Is New Hire Reporting?
New hire reporting is the process of reporting basic information about every new hire to the federal government. This step is separate from your formal onboarding process, including adding employees to workers’ compensation or establishing their taxes.
New hire reporting isn’t specifically for the benefit of your business — it benefits the federal government and its ability to track essential statistical employment data. It also helps manage the mandatory financial responsibilities of people who earn an income.
All you need to do is submit the required information and the government handles the process of organizing and tracking the data. It’s a one-and-done process that never needs to be re-reported for the duration of someone’s employment with your company.
Why Is New Hire Reporting Necessary?
New hire reporting helps the government track financial responsibility for employed individuals. Reporting new hires works to prevent fraud and to keep people accountable for their financial obligations.
The government uses new hire reporting data to track multiple things:
- Tax fraud
- Mandatory child support payments
- Unemployment fraud
- Protecting assistance funds for needy families
New hire reporting lets the government know that people are legally and gainfully employed, which prevents employees from abusing public assistance programs or escaping mandates. This process lifts a lot of responsibility from employers.
You won’t have to research their taxpayer situation, unemployment history, or child support. National institutions will do that on your behalf by federal law.
Are There Any Benefits to New Hire Reporting?
New hire reporting options benefit more than government agencies. Employers often benefit from new hire reporting because it works to prevent things like unemployment fraud or worker’s compensation fraud.
Employers pay for unemployment insurance and worker’s compensation. When employees fraudulently utilize these services, it can create significant financial setbacks for businesses. New hire reporting protects you just as much as it serves the government’s interest.
What Forms Is a New Hire Required to Fill Out?
Your new hire isn’t responsible for completing or submitting their new hire reporting paperwork. If they’re required for another reason to report that they’ve found a new job or details about their employment, that responsibility is solely on the employee. You’ll need to fill out their new hire reporting paperwork. You’ll be able to retrieve the information you need from your new hire’s onboarding forms.
All new hires are required to fill out a W-4 form and an I-9 form. Independent contractors use form W-9. You’ll be able to use their mandatory tax forms to obtain and complete new hire reporting information. Your independent contractor’s W-9 will contain the information they need if your contractor qualifies as a reportable hire.
What Types of Employees Must Be Reported?
All types of employees must be reported as new hires, even in some unconventional circumstances. There are situations where independent contractors must be reported as new hires depending on state law.
Independent Contractors
New hire reporting isn’t required for independent contractors by default, but some states have rules that require employers to report working with independent contractors if their wages or salary exceeds a certain threshold. It’s best to double-check with your state laws before assuming you don’t have to report an independent contractor.
Some Temp Agency and Labor Organization Workers
If you operate a temp agency or a labor organization and your only role is to refer employees to employers, you aren’t required to fulfill new hire reporting requirements. New hire reporting becomes the employer’s responsibility at the time of onboarding.
If your labor organization or temp agency is responsible for paying an employee’s wages, you’ll need to report them as a new hire. If they stop working through or with your company for a period of 60 days or longer, you need to complete new hire requirements again at the time they return.
Rehired Employees
If you completed the process of terminating an employee and rehire the same employee more than 60 days after their termination date, that employee is considered a new hire. If employment was paused or another type of separation caused your working relationship to end, but you did not formally terminate the employee, they will not be considered a new hire.
What Information Do You Need for New Hire Reporting?
New hire reporting information shouldn’t take you long to collect. You’ll already have access to everything you need from your normal onboarding process. There are only seven questions to complete — four about the employee and three about your business.
For Your Employee
- The employee’s name
- The employee’s current address (as a form of contact information)
- The employee’s social security number (SSN)
- The employee’s date of hire/the first day of work for the company
For The Employer
- Employer name
- Employer’s primary address/headquarters
- The employee’s Federal Employer Identification Number (FEIN)
State requirements for new hire reporting may also exist. These requirements vary based on state law. Thankfully, Mosey can help you research and track state-specific new hire reporting requirements to ensure compliance.
Where Do You Report New Hires?
New hires are reported to the state. The state will then forward new hire reporting information to the federal government through the National Directory of New Hires (NDNH).
Your state will retain any information specific to its requirements. You don’t need to submit the information directly to the federal government. Unless otherwise specified, you won’t need to submit information to multiple places.
How Do You Report New Hires?
Each state accepts new hire information submissions in different ways. The most common (and easiest) method is electronically submitting information, which is secure, fast, and efficient. Your state likely has an online submission portal.
If your business hasn’t gone paperless, you can submit new hire reporting forms through physical mail. Just be mindful that mailed forms can take several days to reach their destination and be processed, which may cause you to miss reporting deadlines.
Some states may accept new hire reporting paperwork over the phone or by fax. These methods are less common as electronic form submission becomes the default method of communication between businesses and government agencies.
How Long Do You Have To Meet New Hire Reporting Compliance Requirements?
In most states, you have a maximum of twenty (20) days from the time you’ve hired an employee to file their new hire reporting paperwork. This period isn’t specific to business days, so holidays and weekends still count. It’s best to report a new hire as soon as possible.
While 20 consecutive days is the federally suggested default time period, some states have different requirements for new hire reporting. The following states utilize different reporting rules:
- Alabama: 7 days
- Georgia: 10 days
- Iowa: 15 days
- Maine: 7 days
- Massachusetts: 14 days
- Mississippi: 15 days
- Rhode Island: 14 days
- Vermont: 10 days
- West Virginia: 14 days
It’s best to report new hires as soon as possible, even if your state allows for the full 20 days. There are penalties for noncompliance, and early compliance is the best way to avoid unintended consequences.
What Are the Penalties for New Hire Reporting Non-Compliance?
The fine for failing to report a new hire is relatively small, at $25 per employee. If it’s found that there was a conspiracy between the employer and the employee not to report the hire — like to help the employee avoid child support orders — the fine increases to $500 per employee.
Even if you aren’t deliberately acting inappropriately, it’s a wise decision to avoid the appearance of impropriety by reporting new hires on time.
Staying Compliant With Mosey
New hire reporting is a federal requirement, but states have their own unique requirements in addition to the federally required minimum of information. Mosey’s compliance automation dashboard keeps your business up to date on state-specific business compliance requirements.
As a business owner, you have a lot of paperwork to fill out. Let Mosey help you keep track of what’s next on your agenda. Schedule a demo with Mosey to learn more about how we can optimize compliance for your business.
