When you employ people working in more than one state, you qualify as a multistate employer. It’s your responsibility to report new hires to that state’s designated agency, for several important reasons.
While most employers appreciate the opportunity to source new hires from a larger talent pool, the amount of work that goes into multistate compliance and multistate registration can be frustrating and expensive. Regardless of whether you assign the task to your legal department, your lawyers or yourself, there’s going to be a significant amount of research and paperwork involved.
SixFifty offers a better solution. We can take the hassle out of your multistate employer experience, from complying with each state’s employment laws to registering new hires.
What is multistate employer registration?
Multistate employer registration is covered under the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). It applies to both new hires and rehires. The law was designed to make it easier for federal and state agencies to track down people who owe child support, and to detect fraud in government benefit payments. It also gives them the authority to garnish or assign wages, as the circumstances require.
Employers also have the option to report employees directly to the Department of Health and Human Services (HHS)’s Office of Child Support Enforcement (OCSE). This is often the more convenient way to report new hires or rehires, especially if you have employees in several states.
If you choose to report to HHS, you are required to:
- Register with HHS as a multistate employer
- Designate the state in which you will report
- Submit your new hires electronically (or by “magnetic tape,” also known as a disk, data cartridge or cassette) to the state you have chosen, no more than twice a month (about 12-16 days apart)
Information for multistate registration
According to the HHS, both the federal government and states can require penalties for noncompliance: “Federal law mandates that if a state chooses to impose a penalty on employers for failure to report, the fine may not exceed $25 per newly hired employee. If there is a conspiracy between the employer and employee not to report, that penalty may not exceed $500 per newly hired employee. States may also impose non-monetary civil penalties under state law for noncompliance.”
Federal law also requires you to report new hires within 20 days, although some states may have an even shorter timeframe. It’s incumbent upon you to research state requirements and comply appropriately.
Employers must report seven pieces of data to the state and/or federal agency:
- Employee name
- Employee address
- Employee Social Security number (SSN)
- Employee date of hire or rehire (the date the employee first performs services for pay)
- Employer name
- Employer address
- Federal employer identification number (EIN)
When you’re researching multistate employer requirements, each state agency should tell you:
- Their contact information
- When and how often you must report new hires or rehires
- Any mandatory or optional data required by the state
- How to submit the application
- Whether you are required to report independent contractors
Once you have this information, you can determine exactly which information you need, to which agencies you must report and how long you have to do it.
Multistate employer registration next steps
Once you’ve determined how you’ll register, you’ll need to file the appropriate forms with either the HHS or the applicable state agencies. Be sure to keep records of your registration, including employee registrations.
By this time, you’ve probably already researched other applicable employment laws in that state (or had SixFifty do it for you). This is a good time to make sure your state-specific employee handbooks, offer letters, employment agreements and other documents are ready for each new employee or rehire.
Once you’ve submitted your multistate employer registration, the most important thing to do is keep each agency up to date. Whenever an employee is hired, rehired or leaves the company, update your records and the agencies as needed. This will help eliminate confusion between state and federal agencies, as well as ensure you have met all employment law requirements.
Discover SixFifty’s employment solutions
Becoming a multistate employer can be intimidating. Not only is there a lot of paperwork and research involved, but the threat of fines, fees and other penalties may discourage some employers.
SixFifty’s mission is to make the law accessible to everyone, including small businesses. Instead of racking up billable hours, our proprietary legal technology makes it easy to automatically generate employment documents for all 50 states. All you have to do is answer a few questions about your company. We’ll take that information and use it to automatically generate state-specific documents—all for a lot less than the cost of hiring a lawyer or burdening your legal department.
Find out how we can make your multistate employer registration process easier. Schedule a demo today!
Written by Meili Bell
Meili Bell is the Content Manager at SixFifty. She spends her workdays writing, editing, project managing and reading about the intersection of law and technology. Meili comes to SixFifty from Gifted Music School, a nonprofit music school for the most dedicated young musicians in the region, where she was program director of the school’s flagship program for the last ten...
Full Bio and other articles by Meili Bell