Employers – Are You Properly Reporting Your Newly Hired or Re-Hired Employees and Independent Contractors?
On October 1, 2021, Florida Statute §409.2576 became effective and requires employers, regardless of the number of employees, to report to the State Directory of New Hires (1) newly hired and rehired employees; and (2) individuals who are independent contractors engaged in a trade or business paid more than $600 per year for services rendered. Previously, employers with 250 or more employees were required to report newly hired and rehired employees. This statutory change makes the law applicable to all employers and also requires employers to report independent contractors.
With respect to employees, employers must report within 20 days of the hire or re-hire date or if the employer reports electronically or by magnetic tape, by two monthly transmissions, if necessary, not less than 12 days nor more than 16 days apart.
With respect to independent contractors, employers must report within 20 days after the earlier of (1) the date of the first payment which requires an information return in accordance with IRS guidelines; or (2) the date on which a contract providing for such payments is entered into. Employers must report the independent contractor’s name, address, social security number, date of birth, date services for payment were first rendered by the person, and the name, address and federal employer identification number of the recipient of the services (the employer). Thus, employers should be gathering all of this information from their independent contractors, which is something most employers probably have not done in the past as this information goes beyond that which is required on an IRS Form 1099.
The purpose of this change in the law is to provide information to the Florida Child Support Program in order to facilitate the collection and disbursement of child support payments and to monitor and enforce child support benefits through income deduction orders. The information is also available to other government agencies responsible for determining various benefit programs.
For additional information from the State of Florida Department of Revenue as well as electronic reporting to the State of employees and independent contractors as required by §409.2576, you may click on this link: https://servicesforemployers.floridarevenue.com/Pages/home.aspx.
Employers should be sure that they are properly reporting employees and independent contractors. Those employers utilizing payroll or PEO service providers for payroll purposes should verify that their service provider is reporting new and re-hired employees and then set a process for the employer to report independent contractors. While the statute is silent on penalties for non-compliance, employers should also take notice that this reporting requirement will highlight individuals being treated as independent contractors and, as such, employers should analyze whether people classified as independent contractors are properly classified. Please contact us if you need assistance with the new reporting requirements as well as determining whether a person is appropriately classified as a contractor.