42 USC 653a – State Directory of New Hires
(a) Establishment
(1) In general
(A) Requirement for States that have no directory
Except as provided in subparagraph (B), not later than October 1, 1997, each State shall establish an automated directory (to be known as the “State Directory of New Hires”) which shall contain information supplied in accordance with subsection (b) by employers on each newly hired employee.
(B) States with new hire reporting law in existence
A State which has a new hire reporting law in existence on August 22, 1996, may continue to operate under the State law, but the State must meet the requirements of subsection (g)(2) not later than October 1, 1997, and the requirements of this section (other than subsection (g)(2)) not later than October 1, 1998.
(2) Definitions
As used in this section:
(A) Employee
The term “employee”—
(i) means an individual who is an employee within the meaning of chapter 24 of the Internal Revenue Code of 1986; and
(ii) does not include an employee of a Federal or State agency performing intelligence or counterintelligence functions, if the head of such agency has determined that reporting pursuant to paragraph (1) with respect to the employee could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission.
(B) Employer
(i) In general
The term “employer” has the meaning given such term in section 3401(d) of the Internal Revenue Code of 1986 and includes any governmental entity and any labor organization.
(ii) Labor organization
The term “labor organization” shall have the meaning given such term in section 152(5) of title 29, and includes any entity (also known as a “hiring hall”) which is used by the organization and an employer to carry out requirements described in section 158(f)(3) of title 29 of an agreement between the organization and the employer.
(C) Newly hired employee
The term “newly hired employee” means an employee who—
(i) has not previously been employed by the employer; or
(ii) was previously employed by the employer but has been separated from such prior employment for at least 60 consecutive days.
(b) Employer information
(1) Reporting requirement
(A) In general
Except as provided in subparagraphs (B) and (C), each employer shall furnish to the Directory of New Hires of the State in which a newly hired employee works, a report that contains the name, address, and social security number of the employee, the date services for remuneration were first performed by the employee, and the name and address of, and identifying number assigned under section 6109 of the Internal Revenue Code of 1986 to, the employer.
(B) Multistate employers
An employer that has employees who are employed in 2 or more States and that transmits reports magnetically or electronically may comply with subparagraph (A) by designating 1 State in which such employer has employees to which the employer will transmit the report described in subparagraph (A), and transmitting such report to such State. Any employer that transmits reports pursuant to this subparagraph shall notify the Secretary in writing as to which State such employer designates for the purpose of sending reports.
(C) Federal Government employers
Any department, agency, or instrumentality of the United States shall comply with subparagraph (A) by transmitting the report described in subparagraph (A) to the National Directory of New Hires established pursuant to section 653 of this title.
(2) Timing of report
Each State may provide the time within which the report required by paragraph (1) shall be made with respect to an employee, but such report shall be made—
(A) not later than 20 days after the date the employer hires the employee; or
(B) in the case of an employer transmitting reports magnetically or electronically, by 2 monthly transmissions (if necessary) not less than 12 days nor more than 16 days apart.
(c) Reporting format and method
Each report required by subsection (b) shall, to the extent practicable, be made on a W-4 form or, at the option of the employer, an equivalent form, and may be transmitted by 1st class mail, magnetically, or electronically.
(d) Civil money penalties on noncomplying employers
Terms Used In 42 USC 653a
- Administration: means the Social Security Administration, except where the context requires otherwise. See 42 USC 1301
- Contract: A legal written agreement that becomes binding when signed.
- individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See 1 USC 8
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: when used in such subchapters (but not in subchapter XVI as in effect pursuant to such amendment after December 31, 1973) includes Puerto Rico, the Virgin Islands, and Guam. See 42 USC 1301
- support order: means a judgment, decree, or order, whether temporary, final, or subject to modification, issued by a court or an administrative agency of competent jurisdiction, for the support and maintenance of a child, including a child who has attained the age of majority under the law of the issuing State, or of the parent with whom the child is living, which provides for monetary support, health care, arrearages, or reimbursement, and which may include related costs and fees, interest and penalties, income withholding, attorneys' fees, and other relief. See 42 USC 653
- United States: means (but only for purposes of subparagraphs (A) and (B) of this paragraph) the fifty States and the District of Columbia. See 42 USC 1301
- writing: includes printing and typewriting and reproductions of visual symbols by photographing, multigraphing, mimeographing, manifolding, or otherwise. See 1 USC 1
The State shall have the option to set a State civil money penalty which shall not exceed—
(1) $25 per failure to meet the requirements of this section with respect to a newly hired employee; or
(2) $500 if, under State law, the failure is the result of a conspiracy between the employer and the employee to not supply the required report or to supply a false or incomplete report.
(e) Entry of employer information
Information shall be entered into the data base maintained by the State Directory of New Hires within 5 business days of receipt from an employer pursuant to subsection (b).
(f) Information comparisons
(1) In general
Not later than May 1, 1998, an agency designated by the State shall, directly or by contract, conduct automated comparisons of the social security numbers reported by employers pursuant to subsection (b) and the social security numbers appearing in the records of the State case registry for cases being enforced under the State plan.
(2) Notice of match
When an information comparison conducted under paragraph (1) reveals a match with respect to the social security number of an individual required to provide support under a support order, the State Directory of New Hires shall provide the agency administering the State plan approved under this part of the appropriate State with the name, address, and social security number of the employee to whom the social security number is assigned, and the name and address of, and identifying number assigned under section 6109 of the Internal Revenue Code of 1986 to, the employer.
(g) Transmission of information
(1) Transmission of wage withholding notices to employers
Within 2 business days after the date information regarding a newly hired employee is entered into the State Directory of New Hires, the State agency enforcing the employee’s child support obligation shall transmit a notice to the employer of the employee directing the employer to withhold from the income of the employee an amount equal to the monthly (or other periodic) child support obligation (including any past due support obligation) of the employee, unless the employee’s income is not subject to withholding pursuant to section 666(b)(3) of this title.
(2) Transmissions to the National Directory of New Hires
(A) New hire information
Within 3 business days after the date information regarding a newly hired employee is entered into the State Directory of New Hires, the State Directory of New Hires shall furnish the information to the National Directory of New Hires.
(B) Wage and unemployment compensation information
The State Directory of New Hires shall, on a quarterly basis, furnish to the National Directory of New Hires information concerning the wages and unemployment compensation paid to individuals, by such dates, in such format, and containing such information as the Secretary of Health and Human Services shall specify in regulations.
(3) “Business day” defined
As used in this subsection, the term “business day” means a day on which State offices are open for regular business.
(h) Other uses of new hire information
(1) Location of child support obligors
The agency administering the State plan approved under this part shall use information received pursuant to subsection (f)(2) to locate individuals for purposes of establishing paternity and establishing, modifying, and enforcing child support obligations, and may disclose such information to any agent of the agency that is under contract with the agency to carry out such purposes.
(2) Verification of eligibility for certain programs
A State agency responsible for administering a program specified in section 1320b-7(b) of this title shall have access to information reported by employers pursuant to subsection (b) of this section for purposes of verifying eligibility for the program.
(3) Administration of employment security and workers’ compensation
State agencies operating employment security and workers’ compensation programs shall have access to information reported by employers pursuant to subsection (b) for the purposes of administering such programs.
(4) Veteran employment
The Secretaries of Labor and of Veterans Affairs shall have access to information reported by employers pursuant to subsection (b) of this section for purposes of tracking employment of veterans.