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New Hire Reporting Requirements by State

Author: Vicki M. Lambert, The Payroll Advisor

Both federal and state law require all employers to report certain information regarding newly hired and rehired/recalled employees to designated state agencies within a certain time period after they start working for the employer. All 50 states and the District of Columbia maintain a State Directory of New Hires (SDNH) to which employers must report.

Federal law provides the minimum standards that state new hire reporting programs must meet. These standards include:

  • Who must be reported;
  • The data that must be reported for each new hire/rehire;
  • The time period within which reports must be submitted; and
  • The methods that may be used to submit reports (i.e., electronically, on magnetic media, paper forms).

The following chart shows that many states have additional or tougher reporting requirements with which all employers must comply. For example, reporting time frames may be shorter, more data may be required and, in a number of states, newly hired and/or rehired independent contractors must also be reported (which is not required under federal law at all).

All states follow the federal definition of a newly hired employee (i.e., one not previously employed by the employer), except for Texas, which includes those previously employed by the same employer if the employee must submit a new Form W-4 or was not "formally terminated" or removed from the payroll. However, many state definitions of a rehired/recalled employee vary somewhat from the federal definition (i.e., those returning to employment with a previous employer after at least 60 consecutive days of separation).

In addition, under both federal and state law, some reporting requirements (i.e., reporting methods and frequency) are different for multistate employers - those that hire and employ workers in two or more states. Multistate employers must choose to either:

  • Report each worker separately to the individual states in which they each work; or
  • Submit all reports to only one of the states in which they do business and have employees.

Either way, they must first register as a multistate employer with the federal Office of Child Support Enforcement and notify the agency of their chosen option.