Home | Online Resources | UB Catalog | Campus Libraries | About UB Libraries | Forms | Search | Help

New Hire Reporting

It's good for children

All of us in the Child Support Enforcement community thank you for helping to build the strong partnership that exists today between employers and child support programs across the country. The real beneficiaries are, of course, the millions of children whose lives are made more secure because their parents are paying their child support through wage withholding. The New Hire reporting program is essential to this effort and, together with wage withholding, should result in millions of increased support dollars for children. Your cooperation makes a difference in children's lives, and we thank you again for your commitment.

BACKGROUND ON CHILD SUPPORT

Today America faces an unprecedented number of children growing up in single-parent households, whether from divorce or ended relationships. These children need and deserve financial and emotional support from both their parents.

Given our increasingly mobile society, the growing number of child support cases involving parents residing in different States is not surprising. Keeping track of parents who move from State to State is one of the most difficult tasks in child support enforcement.

"This is a program which will help children get the support they deserve from their parents and will help to get parents to meet their obligations." Carol Minami, President, Quality Connections

The Federal Child Support Enforcement Program has been at work since 1975 when it was established under Title IV-D of the Social Security Act to collect child support payments for children in single-parent families. The program's goal is to ensure that children are financially supported by both parents. The program benefits children and families by locating noncustodial parents, establishing paternity when the parents are not married, and establishing and enforcing child support orders.

Welfare reform legislation enacted in 1996 provides strong measures for ensuring that children receive financial support. Your participation in the implementation of this legislation is vital to its success and can make the difference to millions of families who are in need of child support.

One key provision of welfare reform affecting employers is that all States must have a program that receives and processes information about the newly hired. The New Hire reporting program collects timely information about the newly hired so that child support orders can be more effectively enforced whether parents live in the same State or across State lines. Basic information already on the W-4 form helps child support agencies track the whereabouts of noncustodial parents. This information is transmitted from State directories to a National Directory of New Hires, a component of the Federal Parent Locator Service (FPLS), operated by the Federal Office of Child Support Enforcement. The FPLS serves as a bridge between child support agencies and Federal and State agencies by conducting weekly, biweekly and monthly name/Social Security number matches.

On the local level, New Hire reporting gives State child support agencies the ability to issue wage withholding orders—the most effective means of collecting child support more quickly.

On the national level, the Federal Parent Locator Service matches information with a number of Federal agencies. Under the new welfare reform law, the FPLS has been expanded to gather information from each State's Directory of New Hires and from Federal agencies' New Hire records to serve as a powerful location tool for finding parents all over the country who do not pay their child support.

Your cooperation in reporting newly hired employees will go a long way towards supporting our nation's children.

NEW HIRE REPORTING

New Hire reporting is a process by which you, as an employer, report information on newly-hired employees to a designated State agency shortly after the date of hire.

States can match New Hire reports against their child support records to locate parents, establish an order, or enforce an existing order. Once these matches are done, the State submits the New Hire reports to a National Directory of New Hires. (Federal agencies report directly to the National Directory of New Hires.)

"A lot of people, when a new program is instituted, their first reaction is, 'Oh, great. More government red tape.' I have to admit, though, having been involved with the program for a while now, it's really just a part of our normal business and part of how we want to portray ourselves in the community — as helping in these types of situations."
Jim Owen, Payroll Manager, Meijer, Inc.

Because over 30 percent of child support cases involve parents who do not live in the same State as their children, creating a National Directory of New Hires and matching data against it enables the Federal Office of Child Support Enforcement to assist States in locating parents who are living in other States. Upon receipt of New Hire information from other States, State Child Support Enforcement agencies take the steps necessary to establish paternity, establish a child support order or enforce existing orders.

• Connecticut increased its child support collections by over $3 million in the first four months of the New Hire program.

State agencies operating Employment Security and Workers' Compensation Programs may also have access to their State New Hire information to detect and prevent erroneous benefit payments. State agencies can also conduct matches between the New Hire database and certain other State programs to prevent unlawful or erroneous public assistance payments.

• Florida avoided over $300,000 in improper unemployment insurance payments in just the first three months of the New Hire program.

Highlights

• The New Hire report must contain, at a
  minimum, the following information which is contained on a W-4 form:
  Employee Name
  Employee Address
  Employee Social Security Number Employer Name
  Employer Address
  Federal Employer Identification
  Number (FEIN)
• Some States may require or request additional data.
• New hires must be reported to the State within 20 days of the date of hire.
  NOTE: States may establish more stringent reporting requirements. If an employer reports electronically or by magnetic media, the employer must report by two monthly transmissions (if necessary) not less than 12 nor more than 16 days apart.
• Between October 1, 1997 and June 11, 1998, the National Directory of New Hires had just over one million matches.
• Between 1997 and 2007, New Hire reporting is expected to bring in over $6.4 million of child support.

BENEFITS OF NEW HIRE REPORTING

When you as an employer submit information about your newly hired employees to the New Hire reporting system, you create
benefits for your business, children in your community, and citizens across the country.

New Hire Reporting Improves Each Step of the Child Support Enforcement Process

Because the process of child support enforcement involves a multitude of tasks, the road to collecting child support is made more difficult by an uncooperative noncustodial parent. Child support workers need up-to-date information to help them locate and collect funds from parents who are avoiding their child support responsibilities. New Hire reporting provides another tool with which to locate noncustodial parents quickly, establish paternity and establish and enforce support orders.

"We found that New Hire reporting was respon-sible for the collection of an additional $8 million a year in child support. Any time child support begins to be collected ... it prevents people from having to go on public assistance, it gives children the support they deserve." Connie White, Virginia Child Support Enforcement

New Hire Reporting Establishes More Paternities and More New Child Support Orders

New Hire reporting enables States to locate alleged fathers of children in need of support. They are then notified and provided the opportunity to admit or deny paternity. If paternity is established, an order of support and wage withholding can be made.

New Hire Reporting Reduces Government Spending on Welfare

Unfortunately, some parents do not take financial responsibility for their children. Before welfare reform, they could escape State child support collection agencies by changing their State of residence, thereby avoiding Statewide tracking systems. They could also avoid their duty by quitting a job before State and Federal paperwork would alert authorities to their new employment.

The resulting lack of child support often forces families to seek welfare, Medicaid, and Food Stamps. Timely reporting of New Hire information enables State agencies to locate absent parents sooner and decreases families' dependence on public assistance.

New Hire Reporting Helps Prevent Unemployment Benefit Overpayments

Businesses help reduce fraudulent unemployment payments when they take part in a more efficient New Hire reporting system. When businesses report New Hires, they provide timely information to help reduce the number of employed persons fraudulently receiving unemployment insurance and abusing the system. State Employment Security Agencies use new hire data to help reduce the incidence of illegal or erroneous claims by comparing the new hire information to their active files. This, in turn, can lead to a reduction in unemployment insurance costs for employers.

New Hire reporting also helps prevent and correct erroneous and fraudulent Workers' Compensation claims by matching claims against State New Hire data.

New Hire Reporting — it's good for children and it's good business.

PRIVACY ISSUES

Security and privacy of New Hire data are important issues for all those involved in the implementation of this nationwide program. Federal law requires all States to establish safeguards for confidential information handled by the State agency. All State data is transmitted over secure and dedicated lines to the National Directory of New Hires.

At the Federal level, the Secretary of the Department of Health and Human Services has established and implemented safeguards with respect to the Federal Parent Locator Service that:

• Ensure the accuracy and completeness of information in the Federal Parent Locator Service.
• Restrict access to confidential information in the Federal Parent Locator Service to authorized persons and purposes.

Information To Be Collected For The National Directory of New Hires

New Hire information maintained in the National Directory is limited to the information currently provided on a W-4 form:
the employee's name, address, and Social Security number, and the employer's name, address, and Federal Employer Identification Number.

In addition, quarterly wage data and unemployment compensation information is part of the directory.

"Virginia policy is very strict in defining New Hire reporting as confidential information. It's not shared with anyone other than those people directly working in child support or public assistance programs. We also plan to share it with our Virginia Employment Commission to assist them in catching fraudulent claims for unemployment insurance."
Connie White, Virginia Child Support Enforcement

How Collected Information Will Be Used

Authorized information comparisons and disclosures of data in the National Directory of New Hires are strictly monitored. Federal law limits disclosures or access to the following:

State agencies administering the Child Support Program and the Temporary Assistance for Needy Families (TANF) Program.

The Secretary of the Treasury for purposes of administering advance payments of the Earned Income Tax Credit.

The Commissioner of Social Security for purposes of administering Social Security programs.

Who Has Access

The welfare reform law also includes provisions for making information in the Federal Parent Locator Service available to certain authorized persons for the purposes of establishing parentage and establishing, setting the amount of, modifying, or enforcing child support orders. All requests for information from the Federal Parent Locator Service must go through a State's Child Support Enforcement agency.

MULTISTATE EMPLOYER REPORTING

Well, the program is really quite an easy one. When we look at what we're doing currently with the W-4 information, all we're adding is an extra step of passing along to the agency a copy of it. Multistate employers have a luxury in most cases of being able to do things electronically.
Jim Owen, Payroll Manager, Meijer, Inc.

Multistate employers can range in size from large corporations employing thousands of people across the country, to small businesses with a handful of workers in different States. The only require ment to be con sidered a multistate employer for New Hire reporting purposes is that you have personnel who are employed in at least two States.

Reporting Options

If you are a multistate employer and can report magnetically or electronically, you have two reporting options:

• Report newly-hired employees to the State in which they are working, following the New Hire regulations, requirements and timeframes of each State to which you will report, or
• Select one State where you have employees working and report all New Hires to that State electronically or magnetically.

You may not report using both multi-state and single-state methods

If you choose to report new Hire data on all employees to only one State, notify the Secretary of Health and Human Services which State you have designated as recipient of all your New Hire information for your entire business. You can notify the Secretary in one of three ways:

1. Mail or fax the notification to:

Department of Health and Human Services
Office of Child Support Enforcement
Multistate Employer Registration
Box 509
Randallstown, MD 21133

Fax - (410) 277-9325

Please include the following information:

• Federal Employer Identification Number (FEIN)
• Employer's name, address, telephone number related to the FEIN
• State selected for reporting purposes
• Other States in which your company has employees
• Corporate point of contact

If your company will be reporting new hires on behalf of your subsidiaries who operate under different names and FEINs, please also list the names, FEINs and States where they have employees working.

Note: This option is not available to payroll service companies reporting on behalf of their customers.

2. You can use a specially designed form that contains all of the information listed above. Call (202) 401-9267 to request a copy of the form or download a copy from the OCSE Web Site: http://www.acf.dhhs.gov/programs/cselnewhire/employ/emult.htm

3. You can inform the Secretary by providing your information electronically to the inter-active site at the above Web site address.

Additional Information

The National Directory of New Hires maintains a list of those multistate employers who have elected to use single-state notification. The designated reporting locations of those employers is made available to all States so they know where their State's New Hires are being reported.

If you have questions about reporting information, call your State child support enforcement agency (numbers are listed in the Frequently Asked Questions section).

You are encouraged to call your State child support enforcement agency to make arrangements for reporting.

FREQUENTLY ASKED QUESTIONS

"It's important to communicate with the agencies that are defining the rules because it's not a formidable bureaucracy and in fact they are willing to listen to business concerns and address business needs."
Rachel L. Kirsch, Assistant Counsel and manager of Government Affairs, National Association of Temporary and Staffing Services

The National Directory of New Hires is an integral part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 — better known as welfare reform. This legislation strengthens the effectiveness of the Child Support Enforcement program by including the New Hire reporting program.

To help you better understand New Hire reporting, you need to be aware of some key terminology. For purposes of this discussion and as legally defined — the term "employer" is the same as that described for Federal income tax purposes, including any government entity or labor organization. "Employee" refers to an individual who qualifies for Federal Income Tax withholding from wages earned. "Date of hire" is considered to be the first day services are performed for wages by an individual.

The most frequently asked questions about the New Hire reporting requirements and the program's effect on your business are answered below:

What is New Hire reporting and what is done with the information?

New Hire reporting is a process by which you, as an employer, report 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.

State agencies operating Employment Security and Workers' Compensation Programs may use State New Hire information to detect and prevent erroneous benefit payments. They can also conduct matches between the New Hire database and other State programs to prevent unlawful or erroneous public assistance payments.

Why have a National Directory of New Hires?

It is estimated that over 30 percent of child support cases involve noncustodial parents who do not live in the same State as their children. By matching this New Hire data with child support data at the national level, the Federal Office of Child Support Enforcement assists State agencies in locating noncustodial parents living in other States. Upon receipt of New Hire information from other States, State Child Support Enforcement agencies take the steps necessary to establish paternity, establish a child support order or enforce existing orders.

What is the expected outcome of this New Hire reporting system?

The Department of Health and Human Services has estimated that a New Hire program will increase national child support collections by over $6.4 billion over the next ten years.

This projection was made based on information from twenty-six States that had enacted New Hire reporting prior to welfare reform. These programs significantly increased child support collections, reduced welfare expenditures, and saved millions of dollars in Medicaid, Food Stamps and unemployment insurance claims.

Isn't this information currently available through quarterly wage reporting?

Because some noncustodial parents change jobs frequently, quarterly data is often out-dated 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 avail-able to the child support office. Often, employees located through quarterly data have relocated or are no longer working and wage withholding cannot be initiated. With New Hire reporting, the data will be available within a significantly shorter time period. If the data is reported earlier, non-custodial parents can be located more quickly, allowing child support orders to be established and/or enforced much faster.

Will this reporting process be a burden to employers?

The majority of the information you will submit is already collected when a new employee completes a W-4 form. Although the reporting process is an additional requirement, the majority of employers currently participating in State-established programs report either no or "minor" cost impacts to their operations. To ease the process, States offer a variety of reporting methods.

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 cross-match this data against its active unemployment claimant files and either stop payments or recover erroneous payments. States such as Tennessee, Texas and Virginia have already reported unemployment benefit savings in the millions of dollars. With 100 percent of employers reporting, every State should show significant savings in the future.

How soon must I submit a report after hiring someone?

Federal law gives each State the discretion to establish the timeframe within which employers must report new hires, but that timeframe must ensure that New Hires be reported within 20 days of hire. Thus, States are given the option of establishing reporting timeframes that may be shorter than 20 days. In the case of an employer transmitting reports magnetically or electronically, the employer must report by two monthly transmissions, if necessary. The transmissions may not be made less than 12 days nor more than 16 days apart. You must adhere to the reporting timeframe of the State to which you report. Be sure to check with your State contact to learn your State's requirements (numbers are listed at end of this section.)

What information must be reported and what form should I use to send in my New Hire reports?

Each New Hire report must contain the six data elements found on the W-4 form:

• Employee name, address, and Social Security number
• Employer name, address, and Federal Employer Identification number

Reports must be made either on the W-4 form or, at your option, an equivalent form. Your State may have an alternate form for reporting, but its use is optional. Although most States require only these six basic data elements, some States do require or request additional data. Your State should notify you of its required data elements.

If I layoff and then rehire an employee, or an employee returns after a leave of absence, do I need to send in another New Hire report?

An easy rule of thumb to help you remember when to report a New Hire: If the employee returning to work is required to complete a new W-4 form, the employer must report the individual as a New Hire to the State Directory of New Hires. If, how-ever, the returning employee had not been formally terminated or removed from pay-roll records, there is no need to report that individual as a New Hire.

As a temporary employment agency, must we report as a New Hire each individual placed by our agency?

If your agency is paying wages to the individual, you must submit a New Hire report. The individual needs to be reported only once, unless there is a break in service from your agency and a new W-4 form is required.

If your agency simply refers individuals for employment and does not pay salaries, New Hire reports are not necessary because the employer who actually hires and pays the individual will be required to report the New Hire information.

Do I need to submit a New Hire report for independent contractors and subcontractors performing services for me?

You should contact your State to verify its requirements. However, Federal policy states that, if the work being performed is based on a contract rather than an employer/employee relationship, you are not required to submit a New Hire report. In such a circumstance, the contractor is responsible for reporting his/her employees.

Are labor organizations and hiring halls required to report members under the New Hire reporting program?

Labor organizations and hiring halls must report their own employees — any individuals who work directly for the labor organization or hiring hall. As with a temporary employment agency, if the labor organization or hiring hall simply refers individuals for employment, a New Hire report does not need to be filed.

Do I need to do a New Hire report on a newly-hired individual who quits before the New Hire report is due?

Yes. Because the employer/employee relationship existed and wages were earned, a New Hire report must be submitted. Even
though the employment period was short, the reported information may be the key to locating a delinquent noncustodial parent.

Where and how do I send the information?

New Hire reports should be sent to the State Directory of New Hires in the State where the employee works. Federal law identifies three methods for submitting New Hire information: first class mail, magnetic tapes, or electronic transmission. For employer convenience, States may offer additional options such as fax and Internet transmissions. You will receive information from your State with instructions on where and how to send the New Hire information.

If you are an employer who is sending reports in by magnetic tape or electronically, two monthly transmissions (if necessary) must be made which are between 12 and 16 days apart. Contact the State where you will be submitting your New Hire reports for all technical information regarding electronic reporting.

If you have employees in more than one State, see the MultiState Employer Reporting section for additional information.

How will the New Hire data be safeguarded once it is submitted?

Security and privacy of New Hire data are important issues for all those involved in the implementation of this nationwide program. Federal law requires all States to establish safeguards for confidential information handled by the State agency. All State data will be transmitted over secure and dedicated lines to the National Directory of New Hires. Federal law also requires that the Secretary of the Department of Health and Human Services establish and implement safeguards to protect the integrity and security of information in the Directory and to restrict access to and use of the information to authorized persons and purposes (see section on privacy).

Are there penalties for employers who do not report New Hires?

States have the option of imposing civil monetary penalties for noncompliance. Federal law mandates that if a State chooses to impose a penalty on employers for failure to report, the fine may not exceed $25 per newly-hired employee that the employer fails to report. If there is a conspiracy between the employer and employee not to report, there may be a penalty of up to $500 per newly-hired employee that the employer fails to report. States may also impose non-monetary civil penalties under State law for noncompliance.

What if I have more questions?

The State where you operate a business will provide you with complete information and instructions, as necessary, regarding all aspects of its State New Hire program and your responsibilities as an employer.
If you have additional questions or concerns, you may refer to the listing of State contact telephone numbers at right.

The following telephone numbers are current as of October 1998.

* An asterisk indicates that the toll-free number is only available in the state.

Top of page