42 U.S.C. § 653a — State Directory of New Hires

(a) Establishment. (1) Unless the exception applies, each State must establish an automated “State Directory of New Hires” by October 1, 1997, containing employer information about each newly hired employee. A State that already had a new-hire reporting law on August 22, 1996, may keep using it, but must meet paragraph (g)(2) by October 1, 1997, and the rest of this section by October 1, 1998. (2) “Employee” has the meaning in Internal Revenue Code chapter 24, but excludes an intelligence or counterintelligence employee when the agency head finds reporting could endanger the employee or compromise an investigation or mission. “Employer” has the Internal Revenue Code section 3401(d) meaning and includes governments and labor organizations. “Labor organization” has section 152(5) of title 29’s meaning and includes a hiring hall used to meet section 158(f)(3) agreement requirements. A “newly hired employee” is someone not previously employed by that employer, or someone previously employed but separated for at least 60 straight days. (b) Employer information. (1) Each employer must report to the directory of the State where the employee works the employee’s name, address, Social Security number, first date of paid service, and the employer’s name, address, and Internal Revenue Code section 6109 identification number. A multistate employer that reports electronically or magnetically may designate one State where it has employees and report there, after notifying the Secretary in writing. A federal department, agency, or instrumentality must report to the National Directory of New Hires. (2) A State sets the deadline, but it may not be later than 20 days after hiring, or, for electronic or magnetic reporting, two monthly transmissions if needed, at least 12 and no more than 16 days apart. (c) Format and method. When practicable, the report must use Form W-4 or an equivalent form. It may be sent by first-class mail, magnetically, or electronically. (d) Civil penalties. A State may impose up to $25 for each failure to report a newly hired employee, or $500 when State law treats the failure as a conspiracy between employer and employee to submit no report or a false or incomplete report. (e) Entry. The State must enter employer information in its directory within 5 business days after receiving it. (f) Comparisons. By May 1, 1998, a State-designated agency must directly or through a contractor automatically compare employer-reported Social Security numbers with numbers in the State case registry for cases enforced under the State plan. When a match concerns someone required to pay support, the directory must give the plan agency the employee’s name, address, and Social Security number and the employer’s name, address, and section 6109 identification number. (g) Transmission. (1) Within 2 business days after entry, the State child-support agency must send the employee’s employer a notice directing income withholding for the employee’s monthly or other periodic child-support obligation, including past-due support, unless section 666(b)(3) makes the income exempt. (2) Within 3 business days after entry, the State directory must send new-hire information to the National Directory. Each quarter it must send wage and unemployment-compensation information in the dates, format, and content the HHS Secretary sets by regulation. (3) “Business day” means a day on which State offices are open for regular business. (h) Other uses. (1) The child-support plan agency must use match information to locate people for establishing parentage and establishing, changing, or enforcing support, and may give it to contracted agents. (2) A State agency administering a program listed in section 1320b-7(b) may access employer reports to verify eligibility. (3) Employment-security and workers’-compensation agencies may access them to run those programs. (4) The Labor and Veterans Affairs Secretaries may access them to track veterans’ employment.