Complying With Pennsylvania’s New Hire Reporting Law
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, along with Pennsylvania’s Act 58 of 1997, requires that all employers, regardless of size or type of business, comply with new hire reporting requirements. Employers who have been in business since 1997 are more than likely aware of this legislation; however, a reminder from time to time is valuable because all new employers may not be aware of its requirements. Much of the information contained in this article can be found at Pennsylvania’s New Hire Reporting Program website at www.panewhires.com.
The legislature had two purposes in mind when it passed the New Hire Reporting Law. One purpose was to increase non-custodial parent compliance with child support rulings, and the other was to assist in identifying individuals who fraudulently collect unemployment compensation, workers’ compensation and/or public assistance benefits after returning to work, thereby reducing employers’ unemployment and workers’ compensation costs. Once the required new hire information is received from employers, Pennsylvania will match the New Hire Reports against child support records to locate non-custodial parents, establish child support orders, or enforce existing orders. Pennsylvania will also transmit the data to the National Directory of New Hires to match against child support orders from other states.
What is the reporting requirement?
All employers must report their employees who were newly hired and/or rehired after January 1, 1998, within twenty (20) days of their date of hire to the state New Hire Reporting Program. The “date of hire” is defined in 23 Pa.C.S.A. § 4391 as “[t]he first day an employee performs services for remuneration.” An employee must be reported as a “new hire” if he/she meets the definition of “newly hired employee” as defined in 23 Pa.C.S.A. § 4391, which is as follows:
- a new employee; and
- a rehired former employee who was:
- laid off, furloughed, separated or granted leave without pay for more than 30 days; or
- terminated from employment.
Even if a newly hired employee quits before the New Hire Report is due, the employer must still submit a New Hire Report for that individual since an employer/employee relationship existed and wages were earned. However, if the employee never earned wages, the employer does not need to make a report for that person. If the employee does not fall into any of the above categories, the employee does not need to be reported as a new hire.
What information must be reported?
The employer must report the employer’s name, its Federal Employer Identification Number (FEIN), the employer’s address, a contact name for the employer, and a contact phone number for the employer. In addition, the employer must report the employee’s name, the employee’s address, the employee’s social security number, the employee’s date of hire, and the employee’s date of birth (optional). The employer address should be the legal physical or mailing address for the employer associated with the FEIN, not the address of a payroll service or other third party, even if they are reporting for the employer. The contact name and phone number should be someone who can answer questions about the New Hire Report and that person may be a contact at the payroll service or third-party organization.
Many employers mistakenly assume that the information required by the New Hire Reporting Program is available through other reports submitted to the government. This may be true because employers do submit quarterly wage record reports, but the 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 for child support enforcement. New Hire reporting makes the data available within a significantly shorter period of time, and with current data, non-custodial parents and fraudulent benefit collectors will be located more quickly.
What are the methods of reporting?
Employers may report their new hires by submitting the information on a form provided by the Department of Labor and Industry or by attaching the date of hire and name and telephone number of an employer contact to the W-4 form submitted for the newly hired employee. The information may be transmitted by first-class mail, magnetically, electronically or by another method authorized by the directory of new hires. See 23 Pa.C.S.A. § 4392(b).
Frequently asked reporting requirements
- Temporary employment agencies, labor organizations, and hiring halls: the agency that is paying the individual’s wages must submit the New Hire Report. If the agency simply refers individuals for employment and does not pay wages, the New Hire Report will be submitted by the employer who pays the individual’s wages.
- Seasonal employees: must only be re-reported if they are rehired following termination, a layoff, separation, or a requested leave of absence without pay greater than thirty (30) days.
- Farm workers: must be reported if they receive compensation.
Multi-State Employer Reporting
Federal law allows employers with employees in more than one state to either report each employee to the state in which they work, following each state’s New Hires guidelines, or to report all their new hires to one state in which the employer has at least one employee. Pennsylvania has specific requirements if the employer chooses Pennsylvania as the state to report its multi-state employees. Various questions can be answered by visiting www.panewhires.com, or by calling 1-888-PAHIRES.
The first time an employer fails to report a new hire pursuant to this law, he may be given a written warning. For every subsequent violation, the employer will be subject to a civil penalty of up to $25 per violation. However, if it is determined that the failure to report or the submission of a false report is the result of a conspiracy between the employer and the employee, the employer shall be subject to a civil penalty of up to $500. See 23 Pa.C.S.A. § 4396. Employers should do their part to keep fraud to a minimum by complying with the New Hire Reporting Law. Compliance with this law will help ensure that Pennsylvania’s children receive the child support they deserve, and will help keep all employers’ workers’ compensation and unemployment compensation costs down.
Levi S. Wolf, Esq. is a shareholder in Wolf, Baldwin & Associates, P.C., a general practice firm in Pottstown. He can be reached at [email protected], or by calling 610-323-7436.