Payroll Mistake #2: Failure to Verify and Report New Employees

describe the image(Mistake #2 in a Series of 7) You must verify the identity and legal work status of employees, have proper tax filing info, and follow new hire reporting laws.

Why is this important?

Possible consequences include: Incomplete or erroneous payroll records, fines, and increased scrutiny of your business.

How to avoid this mistake:
Get organized before your new employee starts, and follow laws in a timely manner.

1.  Verify Name and Social Security Number

Record the employee’s name and Social Security number for W-2 reporting. See the employee’s card, or use the Social Security Administration’s Verification Service to verify the number.

2.  Give New Employees Form W-4

Employees should complete Form W-4, asking for SSN, contact info, and filing status, before the first day of work. 

  • Keep the W-4 on file. It remains in effect until an employee completes a new one (tax-exempt employees must complete a new W-4 annually).

3.  Complete Form I-9 and E-Verify

Within three days of hire, verify an employee’s eligibility to work in the U.S. For more info, read “What is a Form I-9?”

4.  Follow New Hire Reporting Laws

New hire reporting laws ensure enforcement of child support orders. Look up your state’s New Hire Reporting Center here.





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