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Employment Law Alert

March 1998

MANDATORY REPORTING OF ALL NEW HIRES The Personal Responsibility Act and Work Opportunity Reconciliation Act of 1996

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he Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (the “Act”) was passed as part of President Clinton’s welfare reform legislation. The Act requires every employer to report all newly hired employees to a designated federal or state agency within twenty days of the date of hire. Under the Act, new hire reporting is required regardless of the employer’s size or type of business and the full or part-time status of the employee. The stated purpose of the Act is to locate parents and establish or enforce child support orders. Although the Act was passed in 1996, its effective date was delayed until recently. Generally, the employer is required to report the newly hired employee’s name, address, date of birth, social security number, and date of hire along with the employer’s name, address, and tax identification number to the Directory of New Hires of the state in which a newly hired employee

• works. This information may be transmitted

through a new hire form, W-4 form, computer disk,

• r web page on the Internet.

In New Jersey, the reporting of new employees by employers is voluntary and is expected to become mandatory once legislation pending in the State Senate is passed. Federal law requires such legislation to be implemented by May 1, 1998, and it is anticipated that New Jersey’s Directory of New Hires will be outsourced and contracted to a private

• rganization. When this happens, we will provide

you with additional information. In New York, the reporting of new employees by employers is mandatory within 15 days of the date that the employee signs an IRS W-4 form. The employee’s name, address and social security number, along with the employer’s name, address and tax identification number, and the date the W- 4 form was signed, or a copy of the W-4 form itself, must be forwarded to the New York State

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This document is published by Lowenstein Sandler PC to keep clients and friends informed about current issues. It is intended to provide general information only. 65 Livingston Avenue www.lowenstein.com

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Roseland, New Jersey 07068-1791 Telephone 973.597.2500 Fax 973.597.2400

Department of Taxation and Finance, New Hire Notification, P .O. Box 15119, Albany, New York 12212-5119. Penalties for non-compliance are $20 multiplied by the number of employees for whom the employer has failed to report, up to a calendar year maximum of $10,000. However, if the employer and employee conspire together to avoid compliance, the penalties are more severe. Further information regarding submissions may be obtained from the New York Business Tax Information Center at 1-800-972-1233. In Pennsylvania, effective January 1, 1998, all employers are required to report information on newly-hired employees to the Department of Labor and Industry. The appropriate information should be sent to Commonwealth of Pennsylvania, New Hire Reporting Program, P .O. Box 69400, Harrisburg, PA 17106-9400. In Pennsylvania, the date from which the 20 day reporting requirement begins is the first day the employee performs services for wages. An employer that fails to report newly hired employees may be provided a written warning for the first violation and is subject to a civil penalty of up to $25 for each violation following the warning. If the employer’s failure to report a new hire is the result of a conspiracy between the employer and the new employee, the penalties are enhanced. Further information regarding submissions is available by contacting 1-888-PAHIRES

• r
• n

the Internet at www.info@panewhires.com. There are special rules for multi-state employers. If you are an employer with employees in more than

• ne state, you must select one state and report all

newly hired employees for all locations to that state. The state selected must be a state in which you have employees. As a multi-state employer, you are required to report magnetically or electronically (diskette, cartridge, magnetic tape, or Internet). In addition, you are required to notify the Secretary of Health and Human Services in writing as to which state you are choosing to report all your new hires. The address to contact is the Department of Health and Human Services, Office of Child Support Enforcement, Multi-State Employer Registration, P .O. Box 509, Randallstown, MD 21133. The fax number for that office is (410) 277-9325. All employers are required to comply with the Act notwithstanding the additional reporting burden discussed in this letter above.

Should you have any questions about how the Act affects your business or have other questions regarding employment practices or workplace compliance issues, please contact Martha L. Lester, Chair of our Employment Law Practice Group, at the Somerville office at 908.526.3300 ext. 2014

• r Julie Levinson Werner at the Roseland office at

973.597.2550.

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UPDATE: NJ Legislation Passed

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he New Jersey Child Support Program Improvement Act was just signed by Governor Whitman. This New Jersey Act, in part, provides for a New Jersey State Directory of New Hires, and requires all employers to report newly hired employees to the Department

• f Humans Services “or its designee.” This

information must be submitted within 20 days of the employee’s hiring, re-hiring, or return to work, unless the employer utilizes magnetic or electronic transmission, in which case the information must be supplied every 15 days. Specifically, the employer must report the employee’s name, address, date of birth, and social security number, along with the employer’s name, address, and federal tax identification number. An employer will receive a written warning for its first violation and thereafter may be penalized $25 for each additional violation. If the employer conspires with its employee to avoid compliance, the employer may be penalized up to $500. The New Jersey Act provides for a waiver of penalties under certain instances. Additional rules and regulations providing more detailed information have not yet been promulgated by the Department of Human Services, but are scheduled to be disseminated before May 1, 1998. We will advise you of those rules and regulations when they become available.

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The New Jersey Child Support Program Improvement Act was just signed by Governor

• Whitman. This New Jersey Act, in part, provides for a New Jersey State Directory of New Hires,

and requires all employers to report newly hired employees to the Department of Humans Services “or its designee.” This information must be submitted within 20 days of the employee’s hiring, re-hiring, or return to work, unless the employer utilizes magnetic or electronic transmission, in which case the information must be supplied every 15 days. Specifically, the employer must report the employee’s name, address, date of birth, and social security number, along with the employer’s name, address, and federal tax identification number. An employer will receive a written warning for its first violation and thereafter may be penalized $25 for each additional violation. If the employer conspires with its employee to avoid compliance, the employer may be penalized up to $500. The New Jersey Act provides for a waiver of penalties under certain instances. Additional rules and regulations providing more detailed information have not yet been promulgated by the Department of Human Services, but are scheduled to be disseminated before May 1, 1998. We will advise you of those rules and regulations when they become available.