From the August 2000 issue of Entrepreneur

States are cracking down on deadbeat dads and fighting fraud in their unemployment and worker's compensation programs. Laudable goals, no doubt-but the end result means entrepreneurs will spend more time filling out paperwork on new hires.

The 1996 welfare reform law required all states to set up new-hire reporting programs. "Besides improving child-support enforcement, the hope is that states will cross-check their new-hire information with their own unemployment-compensation databases and catch people who are collecting benefits if they're working," says Elizabeth Pope, a senior writer and analyst at CCH Inc., a Riverwoods, Florida, company that provides software and information to HR, legal, accounting and small-business professionals. "[The welfare reform law] has the potential to help taxpayers."

While federal law asks for basic information, states can require more. Some states just want the basic facts on your W-4 form. Others want to know such things as health-insurance coverage and the new employee's date of birth. The deadline for reporting new hires also differs state to state. A few states-among them Alabama and Maine-give employers just seven days to report new hires. More confusing still: Each state has its own agency to handle information, and the way you report it varies from state to state.

To learn your state's requirements, visit the Federal Office of Child Support Enforcement's Web site at www.acf.dhhs.gov/programs/cse. Pope has another suggestion for after you've done that: "Call up your state agency and simply say, "What do I do?' " he says. With luck, you'll get someone on the phone who has the answer.



Ellen Paris is a Washington, DC, writer and former Forbes magazine staff writer.