New Hire Reporting

New hire reporting is a federal and state requirement that employers report newly hired and rehired employees to a designated state agency : typically the State Directory of New Hires (SDNH) : within a specified timeframe. The information is used primarily to locate parents who owe child support and to detect unemployment insurance and workers compensation fraud.

Under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, employers must report all new hires (and rehires) within 20 days of their hire date to the state directory. Multi-state employers may elect to report all hires to a single state. Reported information must include: employee name, address, SSN, date of hire, and employer name, address, and EIN.

Required data: employee’s full name, address, Social Security Number (SSN), and date of hire. Employer information: name, address, and Federal Employer Identification Number (FEIN/EIN). Some states require additional data such as date of birth, state of hire, and health insurance availability. Many employers simply submit a copy of the W-4 form to satisfy the requirement.

Federal penalties for non-compliance can reach $25 per employee not reported on time. If the failure is due to a conspiracy between employer and employee, penalties increase to $500 per occurrence. Many states have their own penalty structures in addition to federal penalties. Beyond fines, non-compliance can complicate state audits and workers compensation reviews.

Multi-state employers may either: (1) report to each state where the employee works (following each state’s specific requirements), or (2) designate a single state for all new hire reports and notify the federal Office of Child Support Enforcement of that election. The single-state option simplifies compliance for organizations with employees in many states.

Best practice: automate new hire reporting as part of HRIS onboarding workflows so it triggers automatically when a new employee record is created, rather than relying on manual reminders. Most major HRIS platforms (Workday, ADP, BambooHR) include built-in new hire reporting features. HR should verify reports are filed within the required 20-day window and maintain records of submissions.