In 1996, under President Clinton’s administration, a law was passed that I have found many small company employers are unaware that they must comply with it. It was originally nicknamed the “Deadbeat Dad” law, but it is officially the Personal Responsibility and Work Opportunity Reconciliation Act or PRWORA. (This acronym is horrendous, the government usually does a much more creative job.) This law requires the employer to report ALL new hires to a state agency. So the question is “Are you hiring deadbeats” and not reporting them?
This law is designed to identify “deadbeat” parents, those who are not paying child support and have a court order to do so. While it is a federal law it is administered by each individual state. Thus the particulars may vary from state to state, but basically each employer is required to submit the following information every time they hire a new employee:
- Employee name
- Employee address
- Employee social security number
- Employer’s name
- Employer’s address
- Employer’s Federal Employer Identification number
The information must be submitted within 20 days after a new employee’s date of hire. If an employer submits this information in an electronic format these reports must be sent at least twice a month (if necessary). The reports must be at least 12 days apart but no more than 16 days.
Failure to report new hires can lead to monetary penalties, albeit it relatively small ones as the government goes. States may levy a fine of $25 for each new hire not reported or $500 if the employee and employer conspired together not to report the employee. There is no special recordkeeping requirement associated with the law on a federal level. There may be on a state level.
If the employer has employees in multiple states the employer can designate a state to which they can submit a report for all their employees regardless of which state in which they work. The employer must file electronically, follow all the state rules, and inform the Secretary of Health and Human Services, in writing, what the employer is doing.
There are a few other hoops that you have to jump through if you have employees who have been called to active military duty so you need to understand how the local jurisdiction works.
Here is the link to the Georgia New Hire Reporting site that will provide you with an example of a state program.