Newbie Rules
Do you know your state's requirements for reporting new hires?
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.
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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.