The COVID-19 pandemic has disrupted business in Texas like never before and it has changed how employers in Texas conduct their business. With the recent reopening of businesses, employers are hiring new or rehiring former employees, and with this activity comes a reporting responsibility. The Texas Workforce Commission (TWC) is warning employers to follow the statute to report new hires and rehires to the Office of the Attorney General’s (OAG) New Hire Reporting Program.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires employers to report new hires and rehires within 20 calendar days of the hire/rehire date. If reporting electronically, new hires must be reported at least twice a month, 12 to 16 days apart. Timely reporting helps the TWC in detecting and preventing fraud within the Unemployment Insurance (UI) system. The TWC uses those reports to verify UI claimants who have returned to work to ensure earnings are properly reported. The TWC can identify these claimants when the quarterly UI tax reports are filed for an employer, but if the hire/rehire takes place early in the quarter, the TWC may be erroneously overpaying claimants. The TWC estimates that the average overpayments per claim increase from $416 to $878 as a result of not reporting hires/rehires.
State law provides a penalty of $25 for each employee an employer knowingly fails to report and a penalty of $500 for conspiring with an employee to either fail to file a report or to submit a false or incomplete report. Keep in mind, the state does not consider quarterly wage reporting as the same as New Hire Reporting.
Aside from avoiding penalties, reporting new hires reduces unemployment taxes that employers ultimately pay by preventing unnecessary payments of UI benefits. Another benefit of reporting new hires, is that it helps the OAG locate noncustodial parents sooner and increases child support collections for families.
Please visit the Office of the Attorney General’s website for more information. There are multiple ways to report new hires and you can choose the option that is right for your business. Options include online submission, file uploads through the internet, File Transfer Protocol (FTP), or you can mail or fax a hardcopy of the W-4 and a printed list of employee new hire information.
If you offered any of your employees a chance to return to work and they refused, you need to report this information to the TWC. Please report each individual who refused to return to work on the TWC online Employer Work Refusal Documentation form.
If you suspect an employee may have received unemployment benefits for the same period you used funds from a Paycheck Protection Program loan to pay that employee wages, please report the information to the TWC at PPPreporting.BPC@twc.state.tx.us. Include the employee’s name and last 4-digits of their Social Security number.
HM&M is your trusted advisor to help keep you informed of important developments.
For more information check out HM&M’s COVID-19 Resources page.
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