Failing to report new hires, including 1099 contractors in New York State within 20 calendar days could cost your business thousands of dollars in penalties.
However, by understanding the new hire reporting requirements, you can make sure that your business is compliant. Getting an overview of what’s involved, and tailoring your onboarding processes as needed, will save time, money, and aggravation.
For New York businesses that outsource their payroll, it’s still a good idea to bring up the topic of reporting new hires with their payroll provider as a way of double-checking that they’re on top of this issue.
When did NY add independent/1099 contractors to the new hire list?
The New York State Department of Taxation and Finance New Hire FAQs state:
“Please be aware that effective January 1, 2022, employers are required to report individuals under an independent contractor arrangement with contract(s) in excess of $2,500.”
Why is New York State Requiring New Hire Reporting?
One reason New York State is requiring new hire reporting is to help catch people who owe child support. The new hire reporting makes it easier to identify these people and garnish their wages for child support payments.
Who is responsible for reporting new hires?
All employers must report certain identifying information about each newly hired or rehired employee working in New York State.
Should reporting new hires be part of the onboarding process?
Yes! It should be part of your new hire onboarding checklist.
How are new hires defined?
A newly hired or rehired employee means an employee:
- Previously not employed by the employer
- Previously employed by the employer but separated from such prior employment for 60 or more consecutive days
What types of employers must report new hires?
- Employers who meet the definition of an employer under federal income tax withholding
- Governmental entities (except for federal agencies, which report directly to the National Directory of New Hires)
- Labor organizations (including hiring halls)
- Employers of domestic help
For rules about reporting employees who are temporary, hired from a placement agency, and teachers and professional athletes, see the rules for specific employment types.
What information does my business have to report?
You must provide the following information:
- employee name (first, middle initial, last)
- employee address (street, city, state, and ZIP code)
- employee Social Security number
- employee hire date
- employer name
- employer address (street, city, state, and ZIP code)
- employer identification number (assigned by the Internal Revenue Service)
- if dependent health insurance benefits are available to the employee and if so, the date the employee qualifies for the benefits
How much time do I have to report a new hire?
You must report newly hired or rehired employees who will be employed in New York State within 20 calendar days from the hiring date. The hiring date is the first day the employee:
- performs any services for which they will be paid wages, tips, commissions, or any other type of compensation
- is eligible to earn commissions, for services based solely on commissions
If you report electronically, you must submit two monthly reports (if needed) between 12 and 16 days apart.
Note: If you have a newly hired non-U.S. resident (nonresident alien) visa employee, you have 20 calendar days to report the new hire starting from the date the employee receives a Social Security number (SSN) from the Social Security Administration. Non-U.S. resident employees should file for their Social Security number at the start of employment. You should exercise due diligence to have the employee provide the SSN when it is received. You cannot submit a report without an employee's SSN or use an Individual Taxpayer Identification Number (ITIN) or Permanent Resident Alien (green card) number in place of the SSN.
What are the new hire reporting methods?
Employers who are required to report to New York State (and multistate employers who designate New York as their reporting state) should use one of the methods below to submit the new hire information:
- Online via the New York New Hire Online Reporting Center
- Submit a copy of the employee's Form IT-2104, Employee's Withholding Allowance Certificate, in place of, or in addition to, the federal Form W-4, Employee's Withholding Certificate1
- Fax: 518-320-1080
By mail:
New York State Dept of Taxation and Finance
New Hire Notification
PO Box 115119
Albany, NY 12212-5119
Electronic filers may obtain current specifications by contacting Employer Outreach at 518-320-1079.
Note: You do not have to report or file copies of Forms IT-2104 or federal Form W-4 for existing employees who change deduction amounts or other information.
How are failing to report new hire penalties calculated?
The penalty calculation is $20 x number of employees not reported for failing to report newly hired employees within twenty calendar days.
And the penalty for filing false or incomplete reports is $20 x number of employees.
New Hire Reporting FAQs:
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Must employers submit Form IT-2104 in addition to the federal Form W-4?
Yes, Form IT-2104 (or Form IT-2104-E) includes the required information regarding employee-dependent health insurance benefits and the hire date. Therefore, it must be submitted in place of, or in addition to, the federal Form W-4. -
The requirements state that an employee's name must be provided in the following order: first name, middle initial, last name. Can employers provide the name in a last name, first name, middle initial order?
Yes. The order of the name as stated in the requirements corresponds to the order specified for federal Form W-4. Employers who provide this information in a listing or other written format may provide the name in the alternative order. -
Must employees who discontinued services within 20 days of being hired still be reported?
Yes. You must report them because they were still employees. -
Employers sometimes transfer employees working in other states to New York State. Must these employees be reported for the new hire reporting program?
No. These employees are not newly hired or rehired by the employer, but merely transferred from another state. -
Can employers submit a report of all new employees hired anywhere in the country with an indicator of the state in which they work?
Multi-state employers who report electronically may designate one state (in which that employer has employees) to report newly hired employees.
For employers who do not report electronically, only newly hired employees working in New York State must be reported, and employees who do not work at all in New York State must not be reported.
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Must all employees be reported as new hires in the case of takeovers, mergers, and consolidations by employers?
No, not if the employees were previously reported through the quarterly wage reporting system. -
Can a new hire report be submitted without a Social Security number (SSN)?
No. -
Must the employee's physical address be reported, or is a post office box sufficient for an employee's home address? (For example, the employee may want a post office box for receiving a paycheck from the employer.)
A post office box is sufficient for an employee's home address, because the stated does not intend to modify the W-4 process. New York recognizes the main purpose of the W-4 is to provide federal income tax withholding information to employers. -
What date does the Tax Department use for determining timeliness?
For reports delivered by the U.S. Postal Service, the Tax Department will use the postmark date for determining if the report was submitted in time. -
How can an employer obtain a Federal Employer Identification Number (EIN)?
The IRS has a website where new employers can obtain an EIN. Employers must inform the New York State Tax Department when they obtain an EIN and use that number as their Withholding Tax Identification Number.
As you can see, the government always finds a way to make simple things more complicated. Even worse, they also find ways of shifting and adding new and ever more burdensome responsibilities to employers. How can business owners devote their time to their core business duties, and not become the government’s flunky? That’s easy. Business owners can simply delegate these types of tasks, and others to their local New York payroll experts such as Baron Payroll.
Contact us to learn more about staying compliant with New York State employment laws.
