Monday, March 26, 2012
SC DSS PROPOSES TO CORRECT DEFECTIVE NEW HIRE REPORTING STATUTE
Everybody, hold on to your seats, South Carolina is finally going to make a serious effort to enact legislation that the federal government mandated be put into place in 1998. If and when South Carolina enacts this legislation, all fifty states will have adopted a New Hire Reporting Statute mandating that employers report new hires to the Child Support Enforcement Division of their state's Department of Social Services.
We make no comment on whether South Carolina's proposed legislation complies with federal law. We do note, however, that this "employer-friendly" legislation contains no penalties for employers who ignore the law. In other words, this legislation is "all hat and no cattle." Rather than crafting legislation designed to increase child support collections, the South Carolina DSS prefers to propose legislation that will be sure not to inconvenience the business community in the least. Rather than creating legislation that complies with both the letter and the spirit of the federal mandate, lawyers for the South Carolina DSS prefer to tell South Carolina employers, "Here is our new federally-mandated statute. We've put off enacting this as long as we can. But, don't worry--this won't inconveneince you in any way. This is because, although the reporting requirements are 'mandatory,' we have gutted the penalties. So, if you violate the law, nothing is going to happen to you. Go in peace. And don't worry about a thing."
As usual, readers of this Blog do not have to take our word for it. Following is a description of the proposed legislation as well as "an explanation for each proposal."
Everybody, hold on to your seats, South Carolina is finally going to make a serious effort to enact legislation that the federal government mandated be put into place in 1998. If and when South Carolina enacts this legislation, all fifty states will have adopted a New Hire Reporting Statute mandating that employers report new hires to the Child Support Enforcement Division of their state's Department of Social Services.
We make no comment on whether South Carolina's proposed legislation complies with federal law. We do note, however, that this "employer-friendly" legislation contains no penalties for employers who ignore the law. In other words, this legislation is "all hat and no cattle." Rather than crafting legislation designed to increase child support collections, the South Carolina DSS prefers to propose legislation that will be sure not to inconvenience the business community in the least. Rather than creating legislation that complies with both the letter and the spirit of the federal mandate, lawyers for the South Carolina DSS prefer to tell South Carolina employers, "Here is our new federally-mandated statute. We've put off enacting this as long as we can. But, don't worry--this won't inconveneince you in any way. This is because, although the reporting requirements are 'mandatory,' we have gutted the penalties. So, if you violate the law, nothing is going to happen to you. Go in peace. And don't worry about a thing."
As usual, readers of this Blog do not have to take our word for it. Following is a description of the proposed legislation as well as "an explanation for each proposal."
_________________________________________
Proposed Legislation for New Hire Reporting
Part A: An explanation for each proposal.
1. Amend 43-5-598(A)(6): Change in federal law (Public Law 112-40) amends section 453A of the Social Security Act, effective April 21, 2012, as follows:
(a) Definition of Newly Hired Employee- Section 453A(a)(2) of the Social Security Act (42 U.S.C. 653a(a)(2)) is amended by adding at the end the following:
(C) NEWLY HIRED EMPLOYEE- 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.
2. Amend 43-5-598(C)(2): Change in federal law. P.L. 111-291, §802(a), inserted “the date services for remuneration were first performed by the employee,”. For the effective date [June 8, 2011, but delay is permitted if State legislation is required], see Vol. II, P.L. 111-291, §802(c).
3. Amend Section 43-5-598 by deleting subsection (G): This would be an employer-friendly amendment. DSS believes working proactively with employers through outreach efforts will result in substantially improved compliance, therefore, the need for a monetary penalty to assure compliance would be reduced. The cost to enforce the penalty outweighs the benefits because data systems and matching reports used to identify possible non-compliance produce false positives.
Federal law makes imposition of civil fines optional for states. DSS has contacted federal officials at the National Directory of New Hires NDNH) to determine what other states are doing relative to enforcement. At this point, they are aware of only two states that may impose fines, Utah and North Dakota.
The accuracy of the new hire data and matching processes used to detect failure to report new hires is an ongoing national discussion. The NDNH acknowledges that enforcement is difficult because there are no quantitatively reliable methods for identifying non-compliant employers. The issues of multi-state employers and employers using multiple FEINs to report on the same employee(s) for New Hires and Quarterly Wages create uncertainty in identifying non-compliant employers. The NDNH is aware of the accuracy issues and discussed the issues with states in a recent conference call in November 2011.
During the call, they invited ideas and solutions from the states.Enforcement efforts in South Carolina, as the statute is currently constructed, are complicated and cumbersome. Even if an offending employer is identified, DSS is required to issue warnings and identify each employee for which the employer failed to report to the SDNH. Then, with the burden of proof on DSS, all evidence must be presented by DSS to a family court judge who would determine if a fine is appropriate.
Once a fine is imposed and collected, 66% of the amount collected must be forwarded to the Federal government and the remaining 34% would be retained by DSS. Therefore, the time and effort needed to enforce through fines is not economically efficient. The cost overwhelmingly outweighs the return.
4. Repeal 63-17-1210 entirely: The subject matter is fully addressed by a later provision of law, Section 43-5-598. The two statutes contain inconsistencies and Section 43-5-598 is the statute that tracks the latest federal requirements.
Part A: An explanation for each proposal.
1. Amend 43-5-598(A)(6): Change in federal law (Public Law 112-40) amends section 453A of the Social Security Act, effective April 21, 2012, as follows:
(a) Definition of Newly Hired Employee- Section 453A(a)(2) of the Social Security Act (42 U.S.C. 653a(a)(2)) is amended by adding at the end the following:
(C) NEWLY HIRED EMPLOYEE- 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.
2. Amend 43-5-598(C)(2): Change in federal law. P.L. 111-291, §802(a), inserted “the date services for remuneration were first performed by the employee,”. For the effective date [June 8, 2011, but delay is permitted if State legislation is required], see Vol. II, P.L. 111-291, §802(c).
3. Amend Section 43-5-598 by deleting subsection (G): This would be an employer-friendly amendment. DSS believes working proactively with employers through outreach efforts will result in substantially improved compliance, therefore, the need for a monetary penalty to assure compliance would be reduced. The cost to enforce the penalty outweighs the benefits because data systems and matching reports used to identify possible non-compliance produce false positives.
Federal law makes imposition of civil fines optional for states. DSS has contacted federal officials at the National Directory of New Hires NDNH) to determine what other states are doing relative to enforcement. At this point, they are aware of only two states that may impose fines, Utah and North Dakota.
The accuracy of the new hire data and matching processes used to detect failure to report new hires is an ongoing national discussion. The NDNH acknowledges that enforcement is difficult because there are no quantitatively reliable methods for identifying non-compliant employers. The issues of multi-state employers and employers using multiple FEINs to report on the same employee(s) for New Hires and Quarterly Wages create uncertainty in identifying non-compliant employers. The NDNH is aware of the accuracy issues and discussed the issues with states in a recent conference call in November 2011.
During the call, they invited ideas and solutions from the states.Enforcement efforts in South Carolina, as the statute is currently constructed, are complicated and cumbersome. Even if an offending employer is identified, DSS is required to issue warnings and identify each employee for which the employer failed to report to the SDNH. Then, with the burden of proof on DSS, all evidence must be presented by DSS to a family court judge who would determine if a fine is appropriate.
Once a fine is imposed and collected, 66% of the amount collected must be forwarded to the Federal government and the remaining 34% would be retained by DSS. Therefore, the time and effort needed to enforce through fines is not economically efficient. The cost overwhelmingly outweighs the return.
4. Repeal 63-17-1210 entirely: The subject matter is fully addressed by a later provision of law, Section 43-5-598. The two statutes contain inconsistencies and Section 43-5-598 is the statute that tracks the latest federal requirements.
Labels: New Hire Reporting, Problems at DSS
Comments:
<< Home
Why haven't the other advocates of family court reforma AND the attorneys who say they support family court reform involved in this legislation and stop it for the sham it is.
# posted by 
: 5:36 AM
: 5:36 AM
Even this watered-down version of a law that every other State has adopted pursuant to federal law will not pass this year. Ms. Williamson presented it only because Senator Mike Rose was pressuring DSS to do its job knowing full-well that the General Assembly had no appetite for this bill. And, for his efforts to help the helpless, Senator Rose is beginning to be characterized as "anti-business." There is a good chance that he won't be back in the Senate next year to push either his government accountability bills or a "non-sham" New Hire Reporting Law.
Post a Comment
<< Home
