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New Hire Reporting Requirements: The Complete Guide for Businesses

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If you own a small business, you’re probably doing more than your fair share of the heavy lifting. Surveys have found that most small business owners work twice as much as regular employees. If you’re feeling burnt out, it may be time to consider hiring new employees to relieve some of the burdens.

Before you bring in some fresh blood, it’s best to brush up on the essential new hire reporting requirements. Do you know what’s involved in the employee onboarding process?

We’ve created this brief guide to help you expand your workforce, including gathering the correct new hire data and staying compliant. Read on to explore all there is to know about reporting new hires.

Reporting New Hires

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) is federal legislation that dictates new hire reporting requirements.  Generally, you must report every new hire in the state where the employee works. However, multi-state employers have the option to report all new hires to any one state where they have employees working.

The federal process involves submitting seven pieces of information:

  1. Name of your company
  2. Address of your company
  3. FEIN
  4. Name of your new hire
  5. Your new hire’s address
  6. Your new hire’s SSN
  7. The date you hired the individual

Most states allow employers to utilize the federal W-4 form to report new hires, which contains the data points outlined above. However, there are certain states that require employers to utilize their state-specific new hire reporting form. It’s best to consult a payroll specialist to confirm any variations.

The W-4 or state new hire form can be submitted online in most cases, or via mail or fax.  You can find detailed reporting information on each state’s Resource Page.

New Hire Forms

While new hire forms will vary by location, there are a few forms that all states require. These include a federal W-4 and I-9 employment eligibility form. Many states require an additional state tax form.

If you will be working with an independent contractor, you’ll need to collect a W-9 form. With a few exceptions, most states do not require you to report independent contractors. These individuals work for themselves and will self-report their income.

New Hire Reporting Timeline

Per federal law, you must report new hires within 20 days of the hire date (not the start date). Some states may require you to report sooner. Ultimately, it’s best to gather all federal and state forms into a new hire packet as part of your onboarding process so you can submit them ASAP.

Do You Need to Report Terminations?

In most cases, employers do not need to report terminations. The exception is employees with child support withholding as part of their paycheck. If this is the case, report their termination to the court system.

When an employee leaves or joins your company, you should inform your state provider of worker’s compensation. Your rates sometimes change based on the size of your company.

Understanding New Hire Reporting Requirements

In some situations, new hire reporting requirements can be time-sensitive, resulting in penalties if an employer fails to meet their legal requirements. An efficient onboarding process can expedite hiring and help you remain in compliance with state and federal laws. Working with a payroll specialist can help you avoid fines and offer advice for streamlining critical processes.

When you work with Valor Payroll Solutions, you’ll be working with family-oriented professionals. Our focus on small businesses means we treat every client like an individual. Reach out today to learn how Valor can help you turn payday into a celebration for everyone.

Christina Hageny

Christina Hageny

President - Valor Payroll Solutions

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