New Hires FAQs
What is new hire reporting and what is done with the information?
New hire reporting is a process by which an employer reports information on newly hired employees to a designated state agency soon after the employee’s date of hire. States match new hire reports against their child support records to locate parents, establish a child support order, or enforce an existing order. The state transmits its new hire reports to the National Directory of New Hires (NDNH). The NDNH, a database maintained by the federal Office of Child Support, contains new hire, quarterly wage, and unemployment information provided by state child support agencies, state employment security agencies, and federal agencies. State agencies operating employment security and workers’ compensation programs may use state new hire information to detect and prevent fraud. States may also conduct matches between the new hire database and other state programs to prevent unlawful or fraudulent public assistance payments.
Where and how do employers send the new hire information?
New hire reports should be sent to the State Directory of New Hires (SDNH) in the state where the employee works or, in the case of a multistate employer, to the state which the employer has designated. Federal law identifies three methods for submitting new hire information: first class mail, magnetic tapes, or electronically. For employers’ convenience, many states offer additional options such as fax and online reporting. Federal employers must report new hire data directly to the National Directory of New Hires (NDNH). To learn each state’s method of reporting, see the State New Hire Reporting Contacts and Program Information matrix.
What is the deadline for submitting a new hire report?
Federal law mandates that employers must submit information on every new hire within 20 days of the date of hire, unless the submission is made electronically or magnetically. States are given the option of establishing reporting time frames that are shorter than 20 days. Private employers must adhere to the reporting time frame of the state to which they report. An employer reporting electronically or by magnetic medium must submit two transmissions each month (if necessary, based on the volume of hiring) not less than 12 days nor more than 16 days apart. State-specific information is available on the State New Hire Reporting Contacts and Program Information matrix.
How do employers benefit from new hire reporting?
A direct result of new hire reporting is the reduction and prevention of fraudulent unemployment and workers’ compensation payments. Timely receipt of new hire data allows each state to match this data against its active unemployment claimant files and either stop or recover payments.
What are the penalties on employers for noncompliance with new hire reporting?
Maryland law sets a limit of $20 per month a violation occurs, or $500 if the failure to report is the result of a conspiracy between the employer and the employee.
Do I need to submit a new hire report for independent contractors performing services for me?
Under federal law, employers are not required to report an individual if the work performed is based on a contract rather than an employer/employee relationship. However, some states have laws requiring new hire reporting of independent contractors. You may check these requirements on the State New Hire Reporting Contacts and Program Information matrix.
If I lay off and then rehire an employee, or an employee returns after a leave of absence, do I need to submit another new hire report?
Yes. Employers are required to report a previously employed worker who has been separated from such prior employment for at least 60 consecutive days. If the returning employee had not been formally terminated or removed from payroll records, there is no need to report that individual as a new hire. For state specific new hire reporting information see the State New Hire Reporting Contacts and Program Information matrix.
Is the new hire information available through quarterly wage reporting?
New hire reporting data is available in a shorter time period. Because the data is more current, noncustodial parents can be located faster, allowing child support orders to be established and/or enforced more quickly. Quarterly wage data is often out-of-date before the child support office receives the information. There can be as much as a six-month lag between the time the data is submitted and when it is available to the child support agency (four months for federal agencies) making it less useful for some purposes.
May an employer submit a new hire report without using an employee's Social Security number (SSN)?
No. The Social Security number (SSN) is a required data element in the new hire report. Including a SSN in a new hire report is important for a number of reasons. Before state new hire records are submitted to the National Directory of New Hires (NDNH), the Social Security Administration (SSA) verifies the name and SSN combination (provided to the State Directory of New Hires) with the SSA master file of correct SSNs. If the combination submitted does not correspond to SSA’s file, the new hire report is not entered into the NDNH. Correct SSN data is also important because new hire records are used for cross-matching with outstanding child support cases and with unemployment insurance claims. These cross-matches are performed using the SSN as a key field. It is critical that you use only a valid SSN. Do not submit an Individual Taxpayer Identification Number (ITIN) or Resident Alien (“green card”) number in place of the SSN.
May a payroll service provider who reports new hire information on behalf of several multistate employers streamline the reporting process by reporting all new hires to one state even if some of the employers do not have employees who work in the state to which the payroll service provider has chosen to report?
No. Federal law requires that multistate employers who wish to report their new hires to one state must have employees working in the state which they wish to report. The same policy applies to payroll service providers who report new hires on behalf of employers. If a payroll service provider reports new hires to one state on behalf of a multistate employer, the provider must confirm that the employer is registered with the Department of Health and Human Services (HHS) to report to one state and that the employer has employees working in the state to which the payroll service provider will be reporting. If the employer does not have employees working in the state in which the payroll service provider reports for other customers, then the payroll service provider must report these employees to the respective states in which they work or must register the employer on the HHS Multistate Employer Registry to report to a state where the employer does have employees.
Must labor organizations and hiring halls report their members under the New Hire Reporting program?
Yes. Labor organizations and hiring halls must report their own employees, that is, individuals who work directly for, and are paid by, the labor organization or hiring hall. If the labor organization or hiring hall simply refers an individual for employment, it is not that organization’s responsibility to report the new hire.
Must placement agencies or temporary employment agencies that place individuals with employers report the employees as new hires?
If your agency simply refers individuals for employment and does not pay salaries, new hire reports are not necessary. However, the organization that actually hires and pays the individual, whether on a part-time or full-time basis, is required to report the new hire information. If your agency is paying wages to the individual, you must submit a new hire report. The individual needs to be reported only once, except when there is a break in service from your agency and the individual returns from prior employment after separating for at least 60 consecutive days. Some states may have shorter time frames enacted by their legislators.
Should we report new hires who quit before the reporting deadline?
Yes. Because an employer/employee relationship existed and wages were earned, you must submit a new hire report. Even though the employment period was short, the reported information may be the key to locating a delinquent noncustodial parent.
What if my employee does not have a Social Security number (SSN)?
Any individual eligible to work in the United States, including a resident alien, is entitled to receive a Social Security number and a Social Security card. To apply for a Social Security number and card, your employee needs to contact the Social Security Administration (SSA):
- Visit the website to obtain and complete Form SS-5
- Call 800-772-1213 to obtain the Form SS-5
- Visit a local SSA office These services are free. Ask the employee to return with his or her new or duplicate Social Security card so that you can update your records and report the SSN to your states new hire reporting agency.
What is considered to be the "date of hire"?
The date of hire is the first day in which that person performs services for pay, such as the first day an employee is paid for work. This is also the date the employer recognizes as the first day for income tax withholding.
What is the definition of "employer" for new hire reporting purposes?
Federal law states that an employer for new hire reporting purposes is the same as for federal income tax purposes (as defined by Section 3401(d) of the Internal Revenue Code of 1986) and includes any governmental entity or labor organization. In any case when an employer is required to give an individual a W-2 form, the employer must complete the new hire reporting requirements.
Federal law states that a multistate employer may designate one state in which the employer has employees to which the employer will transmit the report. May a multistate employer designate more than one state in which to report? May a company opt to report most new hires to one central location but continue to have some local offices report to individual states?
No. Federal law allows multistate employers the option of reporting all new hires to one designated state in which the employer has employees or to report new hires to the states in which employees are working.
May a state require a notification from a multistate employer as to which state the employer has chosen to report to?
No. The employer is required to register with the Secretary of Health and Human Services. The federal Office of Child Support Enforcement sends a monthly list to the State Directory of New Hires (SDNH) of multistate employers and where they report.
If a multistate employer has chosen to report to one state, may other states in which the employer has employees require independent contractor reporting to their states?
No. For purposes of new hire reporting for child support, a multistate employer that chooses to report new hires to one state is bound by the new hire reporting requirements of that state. If an employer has employees in State A and State B and chooses State A as the “reporting” state, the employer is bound by the requirements of State A. The employer is not required to report independent contractors to State B if State A does not require such reporting even if State B has gone beyond the federal law to require the reporting of independent contractors. If State A requires reporting of independent contractors, then the employer must report them for State B also.
I am a multistate employer. Do I have to report to each state in which I have employees?
As a multistate employer, you have two reporting options. You may report newly hired employees to the state in which they are working or you may select one state in which you have employees to report all of your new hires. If one state is chosen, your new hire reports must be submitted by magnetic tape or electronically and you must notify the Department of Health and Human Services of your option to report to one state. If you choose to report to a single state, the information may not be available to the employee’s work state for purposes of detecting fraud in the unemployment insurance or worker’s compensation programs.
May a company that "belongs" to another company with which they share a federal employer identification number (FEIN) choose to report as a multistate employer even if the rest of the "family" of companies does not?
No. A single decision should be made as to whether companies within the same "family" of companies that share an FEIN will report individually or together. Regardless of whether the company chooses to report with the group or separately, the company must ensure that all new employees are reported without duplication. In addition, the report submitted on any employee must be specific enough for the child support agency to identify the employee’s work location.
What is a multistate employer?
A multistate employer is an employer with a workforce employed in two or more states and which transmits new hire reports magnetically or electronically.
Are college or university employers required to report students who may be on a work/study program at the university? What about international students on the same program?
Employers must report anyone who meets the definition of an employee as explained in Chapter 24 of the Internal Revenue Code.
Are employers on Native American reservations and lands subject to the new hire reporting requirements?
No, unless the tribe has accepted the jurisdiction of the state for this purpose. There are several ways this may be accomplished. For example, a tribe can enter into an agreement with the state for the cooperative delivery of child support services, including reporting new hires to that state’s State Directory of New Hires (SDNH). A tribe may also operate its own child support (IV-D) system with new hire reporting requirements.
Are there different reporting time frames for employers that submit new hire reports electronically? What record layout should be used?
If you are an employer sending reports by magnetic tape or electronically, two monthly transmissions must be made which are not less than 12 or more than 16 days apart. You should contact the state where you will be submitting your new hire reports for all technical information regarding electronic reporting.
If an employee is on active military status, would the address reported be the current duty state, state of the personnel office or state of the payroll office?
The address that is reported would be the current duty state. This would provide a more accurate locate resource, which is one of the intentions of the Federal Parent Locator Service (FPLS).
May states choose to impose penalties on employers for noncompliance that exceed the amounts provided in the statute?
No. States have the option to choose whether to impose a penalty for noncompliance. If it chooses to impose a penalty, maximum amounts are set in the federal statute. State-specific information may be found in the State New Hire Reporting Contacts and Program Information matrix.
May states require employers to report new hires in fewer than 20 days after the date of hire?
Yes. States may provide the time limit within which the report is required, but it must not be later than 20 days after the employer hires the employee. State-specific information may be found in the State New Hire Reporting Contacts and Program Information matrix.
Must an employer report a newly hired individual who is a foreign national if the employee is working in the foreign nation for an employer based in the US? If so, where should such an employee be reported?
If the employee is a foreign national working in a foreign nation, the employee does not need to be reported. However, a newly hired employee who is on temporary assignment to a post or office outside of the U.S. would need to be reported to the state in which he or she will be working upon return from the temporary assignment. The employer should look to the law of the state in which the employee was hired to determine whether the employee must be reported and, if so, the appropriate location for reporting. See State New Hire Reporting Websites.
Must an employer report an individual who is an alien working in the United States?
Yes, if the alien meets the definition of an "employee". If a person has been hired or rehired and a legal employee/employer relationship exists, a report must be filed.
Must an employer submit a new hire report before the employee has a Social Security number (SSN)?
In the case of newly-hired, nonresident alien visa employees, the 20-day time frame to submit the new hire report to the State Directory of New Hires (SDNH) begins when the employee has received an SSN from the Social Security Administration (SSA).
Should new hire information be reported on a person who has just been hired and is going through training or in a probationary period?
If a person has been hired or rehired and a legal employee/employer relationship exists, a report must be filed. The probationary nature of the employment or the fact that the employee was previously employed by the same company and rehired does not change the need to report.
Some states require an additional data element such as an Unemployment Insurance ID number or a state Employer Identification Number (EIN) for their new hire reporting. When a new business opens and must submit all its employees for new hire, the business does not have this required data element yet. Waiting to get the number will make the reports later than 20 days after the date of hire. What should the employer do?
The employer should submit the new hires within the required timeframe and add the additional data elements to subsequent reports. While it is acceptable to require additional data elements for state use, the required data must be submitted to the National Directory of New Hires (NDNH) within the statutory time frames.
Withholding for income tax purposes is not required for domestic and agricultural workers until a certain monetary threshold is met. Does this mean that a new hire report is not required until the monetary threshold is met?
No. The employee/employer relationship is the determining factor in the requirement to report an individual for new hire purposes, not whether the threshold for income tax withholding has been met.
What are acceptable means by which an employer can report magnetically or electronically?
Employers should refer to the State New Hire Reporting Contacts and Program Information matrix or contact the state to which they report to determine what the state is capable of accepting. The following are among the options:
- The State Directory of New Hires (SDNH) establishes and publishes an Internet e-mail address that allows an employer to submit data either by creating and sending e-mail or by scanning and sending a W-4 or equivalent form.
- The SDNH creates an online website that prompts an employer to enter new hire data and then submit the data.
- An employer sends the SDNH a disk containing the data.
- An employer sends the SDNH a magnetic tape containing the data.
- An employer sends the SDNH a cartridge cassette tape containing the data. Some states may no longer accept magnetic or cassette tapes.
What are the exact time frames that the State Directory of New Hires (SDNH) must meet for entering and processing new hire data?
Within five business days of receiving reports from employers, the SDNH must enter new hire reports from employers into its database. Within two business days after the new hire data is entered into the SDNH:
- The state must conduct a match between the Social Security numbers (SSN) in new hire reports and those in its state child support case registry
- The SDNH must notify the child support agency if a match occurs; and
- If a matched employee’s income is subject to wage withholding, the child support agency must generate and transmit an Income Withholding Order/Notice (IWO) to the employer.
What if I, as an employer, have more questions?
The state where you operate a business will provide you with complete information and instructions on all aspects of its new hire reporting program and your responsibilities as an employer. If you have additional questions or concerns, you may find the correct contact person or website in the State New Hire Reporting Contacts and Program Information matrix.
What information must be reported and what form should I use for my new hire reports?
Each new hire report must contain the six data elements found on the W-4 form and also the date of hire (date services for remuneration were first performed by the employee):
- Employee name, address, and Social Security number (SSN)
- Employer name, address, and Federal Employer Identification Number (FEIN)
Why have a National Directory of New Hires (NDNH)?
It is estimated that more than 30 percent of child support cases involve parents who do not live in the same state as their children. By matching this new hire data with child support participant information at the national level, the federal Office of Child Support Enforcement (OCSE) is able to assist states in locating parents who are living in other states. Upon receipt of new hire information from other states, state child support agencies can take the steps necessary to establish paternity, establish a child support order or enforce existing orders.
Will the IV-D agency be required to send a disclosure notice to employers to let them know the uses of the information they are providing?
There is no federal requirement for a disclosure notice.
When a company merges with another company, forming a new company with a new name and a new Federal Employer Identification Number (FEIN), is new hire reporting necessary for the merged company's employees?
It is not necessary for the company to file new hire reports on all employees acquired through a merger unless the employees complete a new W-4 form. If the employees complete new W-4 forms, then the employer must submit new hire reports. Following a merger, the new FEIN information will be picked up by the Federal Parent Locator Service (FPLS) when the employer submits its next quarterly wage report. State child support agencies appreciate learning of mergers because it helps them keep their employer databases current.
Where can I find the state agency telephone or fax number to submit my new hire reports?
For specific state information, please visit the State New Hire Reporting Contacts and Program Information page on the Office of Child Support website.