Title 42 — The Public Health and WelfareRelease 119-73
§653a State Directory of New Hires
Title 42 › Chapter CHAPTER 7— - SOCIAL SECURITY › Subchapter SUBCHAPTER IV— - GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH CHILDREN AND FOR CHILD-WELFARE SERVICES › Part Part D— - Child Support and Establishment of Paternity › § 653a
Summary
States must create an electronic list called a State Directory of New Hires and have employers report new hires into it. The directory had to be in place by October 1, 1997 (States with a new-hire law on August 22, 1996 may keep their law but must meet some requirements by October 1, 1997 and the rest by October 1, 1998). Employers must send each new worker’s name, address, Social Security number, the date the worker first did paid work, and the employer’s name, address, and tax ID. If an employer has workers in more than one State and sends reports electronically, it may send all reports to one designated State but must tell the Secretary which State it chose. Federal agencies send reports to the National Directory. Reports must be filed within 20 days of hire or, for electronic filers, by two monthly transmissions 12 to 16 days apart. States may accept W–4 forms and can set civil penalties up to $25 per missed report or $500 if employer and employee conspired to hide or falsify reports. Employers’ reports must be entered into the State database within 5 business days. By May 1, 1998, States must match reported Social Security numbers to child-support cases and share matches with the child-support agency, which must notify employers within 2 business days to start withholding support when appropriate. The State Directory must send new-hire data to the National Directory within 3 business days and quarterly wage data as required. Child-support, certain benefit programs, unemployment, workers’ compensation, and Labor and Veterans Affairs may access the data for their work. Definitions: employee = a person who counts as an employee under federal tax law (some intelligence employees can be excluded if a head of the agency says reporting would be dangerous); employer = the person or organization that pays wages under tax law (includes governments, labor unions, and hiring halls); newly hired employee = someone who is new to that employer or who was gone for at least 60 consecutive days.
Full Legal Text
Title 42, §653a
The Public Health and Welfare — Source: USLM XML via OLRC
(a)(1)(A)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)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)As used in this section:
(A)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)(i)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)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)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)(1)(A)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)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)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)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)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)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)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)(1)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)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)(1)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)(A)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)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)As used in this subsection, the term “business day” means a day on which State offices are open for regular business.
(h)(1)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)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)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)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.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsecs. (a)(2), (b)(1)(A), and (f)(2), is classified generally to Title 26, Internal Revenue Code.
Amendments
2021—Subsec. (h)(4). Pub. L. 116–315 added par. (4). 2011—Subsec. (a)(2)(C). Pub. L. 112–40 added subpar. (C). 2010—Subsec. (b)(1)(A). Pub. L. 111–291, § 802(a), inserted “the date services for remuneration were first performed by the employee,” after “of the employee,”. Subsec. (c). Pub. L. 111–291, § 802(b), inserted “, to the extent practicable,” after “Each report required by subsection (b) shall”. 1997—Subsec. (d). Pub. L. 105–33, § 5533(1), substituted “shall not exceed” for “shall be less than” in introductory provisions and “$25 per failure to meet the requirements of this section with respect to a newly hired employee” for “$25” in par. (1). Subsec. (g)(2)(B). Pub. L. 105–33, § 5533(2), substituted “information” for “extracts of the reports required under section 503(a)(6) of this title to be made to the Secretary of Labor”.
Statutory Notes and Related Subsidiaries
Effective Date
of 2011 Amendment Pub. L. 112–40, title II, § 253(b), Oct. 21, 2011, 125 Stat. 422, provided that: “(1) In general.—Subject to paragraph (2), the
Amendments
made by this section [amending this section] shall take effect 6 months after the date of the enactment of this Act [Oct. 21, 2011]. “(2) Compliance transition period.—If the Secretary of Health and Human Services determines that State legislation (other than legislation appropriating funds) is required in order for a State plan under part D of title IV of the Social Security Act [42 U.S.C. 651 et seq.] to meet the additional requirement imposed by the amendment made by subsection (a) [amending this section], the plan shall not be regarded as failing to meet such requirement before the first day of the second calendar quarter beginning after the close of the first regular session of the State legislature that begins after the
Effective Date
of such amendment. If the State has a 2-year legislative session, each year of the session is deemed to be a separate regular session of the State legislature.”
Effective Date
of 2010 Amendment Pub. L. 111–291, title VIII, § 802(c), Dec. 8, 2010, 124 Stat. 3157, provided that: “(1) In general.—Subject to paragraph (2), the
Amendments
made by this section [amending this section] shall take effect 6 months after the date of the enactment of this Act [Dec. 8, 2010]. “(2) Compliance transition period.—If the Secretary of Health and Human Services determines that State legislation (other than legislation appropriating funds) is required in order for a State plan under part D of title IV of the Social Security Act [42 U.S.C. 651 et seq.] to meet the additional requirements imposed by the amendment made by subsection (a), the plan shall not be regarded as failing to meet such requirements before the first day of the second calendar quarter beginning after the close of the first regular session of the State legislature that begins after the
Effective Date
of such amendment. If the State has a 2-year legislative session, each year of the session is deemed to be a separate regular session of the State legislature.”
Effective Date
of 1997 AmendmentAmendment by Pub. L. 105–33 effective as if included in the enactment of title III of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104–193, see section 5557 of Pub. L. 105–33, set out as a note under section 608 of this title.
Effective Date
For
Effective Date
of section, see section 395(a)–(c) of Pub. L. 104–193, set out as an
Effective Date
of 1996 Amendment note under section 654 of this title.
Reference
Citations & Metadata
Citation
42 U.S.C. § 653a
Title 42 — The Public Health and Welfare
Last Updated
Apr 6, 2026
Release point: 119-73