Top Ten Tips Disclaimer
One of the easiest laws to comply with, from the standpoint of laws that make sense and can help an employer's bottom line, is the new hire reporting law, known formally as the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (42 U.S.C. § 653a) on the federal level, and the State Directory of New Hires Act under Texas law (Texas Family Code, Sections 234.101 - 234.104). Under that law, Texas employers must report all new hires and rehired employees within 20 calendar days of the hire, or, if the employer makes new hire reports electronically (online or with magnetic media), at least twice each month, all reports being within 12 to 16 calendar days of each other. Effective September 1, 2007, employers that knowingly fail to report new hires will be liable for a penalty of $25 per unreported employee, and a penalty of $500 for conspiring with a newly-hired employee to fail to make such a report (see Section 234.105 of the Texas Family Code). The report is made to the Texas Employer New Hire Reporting Operations Center, accessible online at https://portal.cs.oag.state.tx.us/wps/portal/tx/. That agency's toll-free number is 1-800-850-6442. TWC has a good information site on new hire reporting at the following Web address: www.twc.state.tx.us/ui/tax/newhire.html.
What Information is Required in a New Hire Report?
The following information must be included in the report of new hires:
Company federal tax ID number
Employee's social security number
First day of paid work
How Does New Hire Reporting Benefit the Company?
How does it make sense and help a company's bottom line to comply with such a reporting requirement? Simple: the reports are used primarily for tracking parents who owe back child support and for reducing fraud under various social programs, including unemployment benefits. Employers are a vital link in the effort to ensure payment of child support, not only through garnishment of wages, but also through the new hire reports. If your employees who are owed child support start receiving it because of someone else's new hire report, you will have a better, more focused employee. What you do can help other employers, and what they do in that regard will help you. New hire reporting also helps your company through reduction of benefit fraud. Part of the unemployment tax that every taxed employer has to pay comes from claim fraud that must be recouped somehow, and of course the "somehow" is by resorting to employers! Since a new employee's wages will not be reported to TWC for up to three or four months following their hire, the new hire report can help TWC detect UI benefit claim fraud three or four months earlier than it might normally be found. For more details, see the article titled "How Employers Can Help Reduce Claim Fraud" in the Post-Employment Problems section of this book. In addition, since the new hire reporting law absolutely requires employees to give you their social security numbers, it is one more tool to use in verifying SSNs (see the article in the next section of this book titled "Verification of Social Security Numbers"). If a cross-match turns up a problem with the SSN, you can then contact the Social Security Administration for assistance in verifying whether the number is valid. Finally, new hire reporting can help avoid the problem of employees engaging in "double-dipping" with other state or federal benefit programs, such as workers' compensation.
What If the New Hire Fails to Give a Social Security Number?
If a new hire tells you he or she does not have a SSN, due to immigration issues or to waiting for one to come through, your company is entitled to require the employee to document that they have an application in process for the number. If they state that they have not applied for one, give them the basic information on how to apply to the Social Security Administration for a number (see http://www.ssa.gov/ssnumber/) and tell them how important it is to get that task done promptly.
If a new hire refuses to give you his or her SSN or address, despite having such information, that may or may not be a sign of other problems to come, but the bottom line is that your company does not have to continue such an employee’s employment. If the employee claims not to have an SSN for religious reasons, the company is entitled to require the employee to document that fact. Such documentation may consist of a statement, affidavit, or other form of attestation to the effect that the employee has opted out of Social Security due to religious objections to such a number or to participating in a welfare program, or something similar. For more details, see "Employees Without Social Security Numbers" in Part II of this book.
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