23-722.01. Employer reporting; exceptions; retention of records; unauthorized disclosure; civil penalty; new hire directory; definitions

A. Subject to the requirements of subsection E, the department of economic security shall implement a program to require all employers doing business in this state to report the following to the department of economic security:

1. The hiring of any employee who resides or works in this state.
2. The rehiring or returning to work of any employee who was laid off, furloughed, separated, granted a leave without pay or terminated from employment.

B. The department of economic security shall eliminate all unnecessary reporting in the information requested to reduce the burden of employers.

C. Employers shall report by submitting a W-4 form or an equivalent form at the option of the employer. The information may be submitted magnetically, electronically or by first class mail, telefacsimile or any other means that are authorized by the department of economic security.

D. Employers shall submit the reports within twenty days after the employee is hired or rehired or returns to work. Employers who submit reports magnetically or electronically shall submit the reports in two monthly transmissions not more than sixteen days apart. The report shall contain all of the following:

1. The employee's name, address and social security number.
2. The employer's name, address and federal tax identification number.

E. An employer who has employees who are employed in two or more states and who transmits new hire reports magnetically or electronically may comply with the new hire reporting requirements by designating one state in which the employer has employees to transmit the report. An employer who has employees in two or more states shall notify the United States secretary of health and human services of the state to which the employer shall send reports.

F. Except as provided in subsection L, the department of economic security or its agent may use the information collected pursuant to this section only for the following purposes:

1. The administration and enforcement of child support pursuant to title IV-D of the social security act. Except as provided by federal law, the information collected shall only be used to locate a person to establish paternity and to establish, modify and enforce support obligations. The information may be disclosed to an agent under contract with the department of economic security to carry out this purpose. The information may also be disclosed to agencies of this state, political subdivisions of this state, federal agencies involved with support and other states and their political subdivisions seeking to locate persons to enforce support pursuant to title IV-D of the social security act.
2. The identification and prevention of benefit fraud in assistance programs under title 46, chapter 2, article 5.
3. The administration of employment security services pursuant to this chapter and workers' compensation programs pursuant to chapter 6 of this title.

G. The information collected pursuant to this section shall not be disclosed pursuant to title 39, chapter 1. An employee or agent of this state who discloses any information collected pursuant to this section without authorization is subject to a civil penalty of one thousand dollars for each offense. The department of economic security may impose and collect the penalty and shall deposit any collections in the state general fund. Any unauthorized release of information is cause for the administrative discipline of the employee or agent.

H. The department shall operate a state directory of new hires comprised of information received from employers. The department shall enter information received from employers into the state directory of new hires within five business days after receipt. The information shall be forwarded to the national directory of new hires within three business days after entry into the state directory of new hires. For the purposes of this section, a business day is a day when state offices are open for regular business.

I. The department of economic security shall conduct, directly or by contract, an automated comparison of social security numbers reported by employers pursuant to this section and the social security numbers on record in the state case registry of child support orders.

J. If a comparison conducted pursuant to subsection I reveals a match of the social security number of an obligor required to pay support in a title IV-D case, the department, within two business days, shall issue an income withholding order to the employer of the person obligated to pay support directing the employer to withhold the ordered amount from the income of the employee.

K. This section does not allow the department to impose penalties on employers for failing to comply with this section's reporting requirements.

L. The department of economic security and the Arizona health care cost containment system administration may use the information collected pursuant to this section to verify eligibility under title XIX of the social security act.

M. For the purposes of this section:

1. "Employee" means a person who is employed within the meaning of chapter 24 of the internal revenue code of 1986. Employee does not include an employee of a federal or state agency performing intelligence or counterintelligence functions if the head of the agency has determined that reporting with respect to the employee could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission.
2. "Employer" has the same meaning prescribed in section 3401(d) of the internal revenue code of 1986 and includes any governmental entity and any labor organization.

History: Laws 1994, 2nd Reg. Sess., Ch. 374, § 17; Laws 1997, 1st Reg. Sess., Ch. 219, § 4; Laws 2008, Ch. 79, § 1; Laws 2009, 3rd Sp. Sess., Ch. 10, § 2; Laws 2012, 2nd Reg. Sess., Ch. 49, § 1.

Ariz. Rev. Stat. § 23-722.01