New Hire Reporting

What the law requires

The requirement comes from the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Under federal law, employers must report each new hire within 20 days of the hire date, although several states set a shorter deadline. The federal minimum data is:

• Employee name, address and Social Security number
• Employer name, address and Federal Employer Identification Number (FEIN)

Many states also ask for the hire date, date of birth, state of hire, salary and whether health insurance is available. States pass the data to the National Directory of New Hires, which supports child support enforcement across state lines.

Who counts as a new hire

Anyone who was not previously employed by you, plus rehires: under federal guidance, an employee returning after being separated for at least 60 consecutive days must be reported again. That matters for seasonal employers who recall the same workers every year and for staffing firms whose temps cycle on and off payroll.

Some states also require reports on independent contractors paid above a threshold. Check each state's rules if you use contractors there.

Multistate employers

Employers with employees in two or more states can choose to report all new hires to one state where they have employees, rather than to each state separately. To do that, they must register their choice with the federal Department of Health and Human Services and report electronically. Most large employers and payroll providers use this option to simplify filings. Without it, each hire is reported to the state where they work.

How it fits the onboarding workflow

New hire reporting is usually handled by payroll or the payroll provider, built from the employee's Form W-4 and HRIS record. The practical risk is in timing: if a new hire's paperwork is incomplete, the report slips. Make it part of your new hire paperwork checklist, confirm your payroll provider files it automatically, and spot-check a sample each quarter. For rehired employees, add a step to reboarding so returning workers are not missed.

Penalties and common mistakes

Federal law lets states set penalties of up to $25 per unreported employee, or up to $500 where the employer and employee conspire not to report. Amounts vary by state. Common mistakes:

• Assuming the payroll provider files new hire reports when the service was never turned on.
• Not reporting seasonal or recalled workers who were off payroll for 60 days or more.
• Reporting to headquarters' state for remote employees who work elsewhere, without a multistate election.
• Missing a state deadline shorter than 20 days.

This is general information; check each state's agency for current rules.