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The National Directory of New Hires: An Overview

Changes from February 24, 2014 to October 1, 2019

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The National Directory of New Hires

February 24, 2014: In Brief Updated October 1, 2019 (RS22889)

The National Directory of New Hires (NDNH) is a national database of personal, wage, and employment information on American workers.1 Although the authority for the NDNH was originally established as part of the 1996 welfare reform law (P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996; PRWORA), more than two dozen states had established new hires reporting programs at their own initiative prior to its enactment.2 Historically, the primary purpose of the NDNH has been to aid in efforts by state child support enforcement (CSE) agencies to locate parents and enforce child support orders. (According to HHS, an estimated 7.7 million noncustodial parents and putative fathers3 were located through the NDNH in FY2018, up from 2.8 million in FY1999.4) However, federal law also permits NDNH data to be shared with other specified programs and agencies (mostly for program integrity and policy evaluation research purposes).

The NDNH is part of the Federal Parent Locator Service (FPLS).5 It is maintained by the federal Office of Child Support Enforcement (OCSE),6 which is a component of the Administration of Children and Families (ACF) at the Department of Health and Human Services (HHS). The data in this system come from information that is reported by the State Directories of New Hires, State Workforce Agencies, and federal agencies to OCSE. HHS estimates that about 793 million records were posted to the NDNH during FY2018.7

The first section of this report provides an overview of the NDNH system components and data processes. The second and third sections discuss the entities that may receive NDNH data and selected policy issues associated with the system (including proposals in the FY2020 President's budget submission).

System Components and Data Processes Components

The NDNH contains data from three different sources (or "files"): the new hires file, the quarterly wage file, and the Unemployment Insurance file.

The new hires (NH) file contains information from each employee's W-4 form.8 Employers are required by Section 453A of the Social Security Act to send NH reports to the appropriate State Directory of New Hires (SDNH), which then compiles and sends the required information to the NDNH. (The state directories may be housed in a state or local child support agency, the state workforce agency, the state revenue department, or a private vendor under contract with the state.9) Federal employers (i.e., agencies) send their NH reports directly to the NDNH.10 An NH report contains six data elements: the name, address, and Social Security number of each new employee;

Summary

The National Directory of New Hires (NDNH) is a database that contains personal and financial data on nearly every working American, as well as those receiving unemployment compensation. Contrary to its name, the National Directory of New Hires includes more than just information on new employees. It is a database that includes information on (1) all newly hired employees, compiled from state reports (and reports from federal employers), (2) the quarterly wage reports of existing employees (in Unemployment Compensation (UC)-covered employment), and (3) unemployment compensation claims. The NDNH was originally established to help states locate noncustodial parents living in a different state so that child support payments could be withheld from that parent's paycheck. Since its enactment in 1996, the NDNH has been extended to several additional programs and agencies to verify program eligibility, prevent or end fraud, collect overpayments, or assure that program benefits are correct. Although the directory is considered very effective, concerns about data security and the privacy rights of employees remain a part of debates regarding expanded access to the NDNH.


The National Directory of New Hires

Background

The National Directory of New Hires (NDNH) is a database of personal information and wage and employment information of American workers. Employers are required by P.L. 104-1931 to send new hire reports to the State Directory of New Hires, which then sends the required information to the NDNH. States also are required to send quarterly wage information of existing employees (in UC-covered employment) and unemployment compensation claims information to the NDNH. Federal employers (i.e., agencies) send their new hire reports and quarterly wage information directly to the NDNH. A new hire report contains six data elements on new employees, which include the name, address, and Social Security number of each new employee and the employer's name, address, and tax identification number.

The NDNH contains three components. (1) The first component of the NDNH is the new hires file (i.e., report). It contains information that is also on each employee's W-4 form.2 (2) The second component of the NDNH is the quarterly wage file.3 The quarterly wage file and the employer's name, address, and tax identification number. (Some states require or request additional information.) The quarterly wage (QW) file contains quarterly wage information on individual employees in UCUnemployment Insurance (UI)-covered employment.11 This information comes from the records of the State Workforce Agencies (SWAs; sometimes called State Employment Security Agencies) and the federal government. When an individual has more than one job, separate quarterly wage records are established for each job. (3) The third component of the NDNH is the Unemployment Compensation file. The Unemployment Compensation fileThe SWAs and federal government employers must submit the name, Social Security number, and wage amount for each employee, and the employer's name, address, and tax identification number. All of these data must be delineated by quarterly reporting period. Separate quarterly wage records are established for each job held by an individual. The Unemployment Insurance (UI) file contains information pertaining to persons who have received or applied for unemployment compensationbenefits, as reported by State Workforce Agencies.4the SWAs.12 With respect to this file, the state can only submit information that is already contained in the records of the state agency (i.e., generally the State Workforce Agency) that administers the Unemployment Compensation program.5

Thus, the NDNH obtains its data from State Directories of New Hires, State Workforce Agencies, and federal agencies.

The NDNH, itself, is a component of the Federal Parent Locator Service (FPLS), which is maintained by the federal Office of Child Support Enforcement (OCSE) and is housed at the Social Security Administration's National Computer Center in Baltimore, MD. According to the Department of Health and Human Services (HHS), during FY2010 about 672 million records were posted to the NDNH.

Original Purpose

The original purpose of the NDNH was to help states6 locate child support obligors who were working in other states so that child support could be withheld from the noncustodial parent's paycheck. It is estimated that about 30% of child support cases involve noncustodial parents who do not live in the same state as their children.7 States generally use NDNH data rather than state new hire data or state quarterly wage data because they are more likely to acquire earnings information about noncustodial parents who have obtained work or claimed unemployment insurance benefits in a different state, or who are employed by the federal government.8 Moreover, because many noncustodial parents are in temporary employment or move from job to job, the quick reporting of information on new hires greatly increases the likelihood that the NDNH will be able to locate a noncustodial parent and pass on the information to states, so that the Child Support Enforcement (CSE) agencies can collect child support via income withholding before the noncustodial parent changes jobs.9 Since its enactment in 1996, access to the NDNH has been expanded, mostly to prevent fraud and abuse, to certain other programs and agencies (discussed later).

National Directory of New Hires Data

Employers are required to collect from each newly hired employee and transmit to the State Directory of New Hires10 a report that contains the name, address, and Social Security number of the employee and the employer's name, address, and tax identification number. Most states require only these six basic data elements in each new hires report; some states require or request additional information. The State Directory of New Hires is required to submit its new hire reports to the NDNH.

Data Deletion Requirements

New hire reports must be deleted from the NDNH 24 months after the date of entry. For CSE purposes, quarterly wage and unemployment compensation reports must be deleted 12 months after entry unless a match has occurred in the information comparison procedures. The reporting and deletion requirements result in a constant cycling of wage and employment data into and out of the NDNH. (The HHS Secretary may keep samples of data entered into the NDNH for research purposes.11)

Data Verification

The HHS Secretary has the authority to transmit information on employees and employers contained in the new hires reports to the Social Security Administration (SSA), to the extent necessary, for verification. SSA is required to verify the accuracy of, correct, or provide (to the extent possible) the employee's name, Social Security number, and date of birth and the employer's tax identification number.

According to OCSE, all Social Security numbers on new hire reports and unemployment compensation files are verified by SSA before the information is added to the database of the National Directory of New Hires. Quarterly wage files, however, often do not include all of the necessary elements for a successful verification. In such situations, the information is transmitted to the NDNH, but it is flagged indicating that SSA was not able to verify the Social Security number and name combination.12

Time Frames

Employers must provide a new hires report on each newly hired employee to the State Directory of New Hires generally within 20 days after the employee is hired.13 The new hires report must be entered into the database maintained by the State Directory of New Hires within five business days of receipt from an employer.

Within three business days after the new hire information from the employer has been entered into the State Directory of New Hires, the State Directory of New Hires is required to submit its new hire reports to the NDNH.

Within two business days after the new hire information is received from the State Directory, the information must be entered into the computer system of the NDNH.

For purposes of locating individuals in a paternity establishment case or a case involving the establishment, modification, or enforcement of child support, the HHS Secretary must compare information in the NDNH against information in the child support abstracts in the Federal Child Support Case Registry at least every two business days. If a match occurs, the HHS Secretary must report the information to the appropriate state CSE agency within two business days. The CSE agency is then required to instruct, within two business days, appropriate employers to withhold child support obligations from the employee's paycheck, unless the employee's income is not subject to withholding.

Quarterly wage information on existing employees is required to be transmitted to the NDNH from the State Workforce Agencies within four months of the end of a calendar quarter. However, some states report quarterly wage data to the NDNH on a monthly or weekly basis. Federal agencies are required to transmit quarterly wage information on federal employees to the NDNH no later than one month after the end of a calendar quarter.14

Unemployment compensation information (which comes from State Workforce Agencies) is required to be transmitted to the NDNH within one month of the end of a calendar quarter.15

Current Access to the National Directory of New Hires

In order to safeguard the privacy of individuals in the NDNH, federal law requires that the OCSE restrict access to the NDNH database to "authorized" persons. Moreover, the NDNH cannot be used for any purpose not authorized by federal law. Thus, in order for any agency not mentioned in this section to gain access to the NDNH, Congress must authorize a change in law.

The HHS Secretary is required to share information from the NDNH with state CSE agencies, state agencies administering the Title IV-B child welfare program, state agencies administering the Title IV-E foster care and adoption assistance programs, state agencies administering the Temporary Assistance for Needy Families (TANF) program, the Commissioner of Social Security, the Secretary of the Treasury (for Earned Income Tax Credit purposes and to verify income tax return information), and researchers under certain circumstances.16

P.L. 106-113 (enacted in November 1999) granted access to the Department of Education. The provisions were designed to improve the ability of the Department of Education to collect on defaulted student loans and grant overpayments. OCSE and the Department of Education negotiated and implemented a computer matching agreement in December 2000.17

P.L. 108-199 (enacted in January 2004) granted access to the Department of Housing and Urban Development. The provisions were designed to verify the employment and income of persons receiving federal housing assistance.18

P.L. 108-295 (enacted in August 2004) granted access to the State Workforce Agencies responsible for administering state or federal Unemployment Compensation programs. The provisions were designed to determine whether persons receiving unemployment compensation are working.19

P.L. 108-447 (enacted in December 2004) granted access to the Department of the Treasury. The provisions were designed to help the Treasury Department collect nontax debt (e.g., small business loans, Department of Veterans Affairs (VA) loans, agricultural loans, etc.) owed to the federal government.20

P.L. 109-250 (enacted in July 2006) granted access to the state agencies that administer the Food Stamp program. These provisions were designed to assist in the administration of the Food Stamp program. P.L. 110-246 (enacted in June 2008) changed the Food Stamp program references to the Supplemental Nutrition Assistance Program (SNAP).21 P.L. 113-79 (enacted in February 2014) required all state SNAP agencies (rather than giving them the option) to data-match with the NDNH at the time of SNAP certification for the purposes of determining eligibility to receive SNAP benefits and determining the correct amount of those benefits.22

P.L. 110-157 (enacted in December 2007) requires the Secretary of Veterans Affairs to provide the HHS Secretary with information for comparison with the National Directory of New Hires for income verification purposes in order to determine eligibility for certain veteran benefits and services. It requires the Secretary to (1) seek only the minimum information necessary to make such a determination; (2) receive the prior written consent of the individual before seeking, using, or disclosing any such information; (3) independently verify any information received prior to terminating, denying, or reducing a benefit or service; and (4) allow an opportunity for an individual to contest negative findings. P.L. 110-157 terminated the New Hires Directory comparison authority for the VA Secretary at the end of FY2011 (i.e., September 30, 2011). P.L. 112-37 (enacted in October 2011) extended the termination date to November 18, 2011. During the period from November 19, 2011, through September 29, 2013, the provision was not in effect. The Department of Veterans Affairs Expiring Authorities Act of 2013 (P.L. 113-37) made the provision effective beginning September 30, 2013, and for 180 days thereafter.23

Concerns Regarding the National Directory of New Hires

The NDNH is almost unanimously viewed as a successful and pivotal element of the CSE program. According to HHS, in FY2010 4.7 million24 noncustodial parents and putative fathers were located through the NDNH, up from 2.8 million in FY1999 (a 68% increase). The NDNH, however, does not provide information on the self-employed nor does it include hours worked or industry/occupation-related data.25

Since the establishment of the NDNH, federal law has been amended six times to expand access of more programs and agencies to the NDNH (listed above). Although Congress specifically included several provisions that would safeguard the information in the NDNH,26 some advocacy groups are concerned that as more agencies and programs are granted access to the NDNH, the potential for mismanagement of the database and accidental or intentional misuse of confidential information escalates.27

The NDNH is a database that contains personal and financial data on nearly every working American, as well as those receiving unemployment compensation. The size and scope of the NDNH has continued to cause much concern over whether the privacy of individuals will be protected. In addition to the data security safeguards, federal law includes privacy protection provisions that require the removal or deletion of certain information in the NDNH after specified time periods.28 It has been argued that stronger safeguards may be needed to prevent the unauthorized intrusion into the personal and confidential information of millions of Americans associated with the NDNH.

The federal government and states administer numerous benefit programs that provide aid, in cash and noncash form, to persons with limited income. In theory, all of these programs could use the employment and income information contained in the NDNH to verify program eligibility, prevent or end unlawful or erroneous access to program benefits, collect overpayments, or assure that program benefits are correct. Some observers are worried that more of these federal and state programs will try to obtain access to the NDNH. They contend that expanded or wider access to, and use of, these data could potentially lead to privacy and confidentiality breaches, financial fraud, identity theft, or other crimes.29 They also are concerned that a broader array of legitimate users of the NDNH may conceal the unauthorized use of the personal and financial data in the NDNH.

Some policymakers maintain that, although many agencies and programs could potentially benefit from access to the NDNH, those entities will not pursue access because many of these agencies currently do not have the computer capacity or capability to use an automated system such as the NDNH. Many of these agencies and programs are administered at the local level where computer availability is limited or computer capability to interface with the automated NDNH is nonexistent. Moreover, many of the privacy protections and strict security requirements tied to the NDNH may be administratively burdensome for many agencies.

Finally, some child support advocates are concerned that the wider access to the NDNH may have negative repercussions for the CSE program in that as other programs and agencies use the NDNH effectively and find matches in cases that involve an overpayment, those agencies will want to collect their money and may use income withholding as the mechanism to do so. Thus, these other programs will be in direct competition with the CSE program for the income of noncustodial parents.

Footnotes

P.L. 110-351 (enacted October 7, 2008)

The NDNH "shall provide the Commissioner of Social Security with all information in the National Directory."a

P.L. 104-193 (enacted August 22, 1996)

P.L. 108-295 (enacted August 9, 2004)

P.L. 109-250 (enacted July 27, 2006)

P.L. 110-246 (enacted June 18, 2008)

P.L. 113-79 (enacted February 7, 2014)b To discharge the duties of the Comptroller General under 31 U.S.C. §716.c

To verify the income of individuals participating in certain enumerated USDA housing programs.

To conduct analyses of the employment and income reporting of those individuals (after removal of personal identifiers).dSource: Adapted from U.S. Department of Health and Human Services (HHS), Administration for Children and Families (ACF), Office of Child Support Enforcement (OCSE), A Guide to the National Directory of New Hires, pp. 4-5, https://www.acf.hhs.gov/sites/default/files/programs/css/a_guide_to_the_national_directory_of_new_hires.pdf, with additional CRS legislative analysis. a. The SSA uses NDNH data (pursuant to this authority) to establish or verify eligibility or payments under the Supplemental Security Income program, to establish or verify eligibility or continuing entitlement under the Disability Insurance program, to administer the Ticket-to-Work and Self-Sufficiency program, and to determine eligibility of applications for Extra Help (low-income subsidy assistance) under the Medicare Part D Prescription Drug Coverage Program. For further information, see SSA matching agreements 1074, 1098, and 1306, https://www.ssa.gov/privacy/computer_matching_programs.html. b. P.L. 109-250 allowed state agencies that administer the "Food Stamp program" to receive NDNH data. P.L. 110-246 changed program references to the "Supplemental Nutrition Assistance Program." P.L. 113-79 required all state SNAP agencies (rather than giving them the option) to data-match with the NDNH at the time of SNAP certification for the purposes of determining eligibility to receive SNAP benefits and determining the correct amount of those benefits. c. 31 U.S.C. §721 provides that "no provision in the Social Security Act, including Section 453(l) of that Act, shall be construed to limit, amend, or supersede the authority of the Comptroller General to obtain any information or to inspect any record under section 716 of this title."

d. P.L. 115-334 granted the USDA "the same access to information and subject to the same requirements applicable to the Secretary of Housing and Urban Development as provided in Section 453 of the Social Security Act … to verify income for individuals participating in [enumerated programs]." These USDA authorities were intended to align the treatment of the rural housing programs with similar HUD programs, as well as to address the Improper Payments Act. They were originally enacted on a temporary basis in Section 749 the FY2018 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (P.L. 115-141, Division A).

When the authority for the NDNH was established as part of the PRWORA in 1996, it specified that certain entities (in addition to state CSE agencies) could receive data from the NDNH, namely

  • State Welfare (Title IV-A or "Temporary Assistance for Needy Families" (TANF)) Agencies (to carry out their responsibilities under the TANF program);
  • the Secretary of the Treasury (to administer the EITC and conduct employment verification for tax returns); and
  • entities conducting research found by the HHS Secretary to be likely to contribute to achieving the purposes of Part A (i.e., the TANF program) or Part D (i.e., the CSE program) of the Social Security Act.

The PRWORA also required the NDNH to provide the Social Security Commissioner with "all information in the directory." NDNH data are currently used by the SSA (pursuant to this authority) for purposes that include determinations of eligibility and payment amounts for the Supplemental Security Income (SSI) program, the Disability Insurance (DI) program, the Ticket-to-Work and Self-Sufficiency (Ticket) program, and Extra Help (low-income subsidy assistance) under the Medicare Part D Prescription Drug Coverage Program.22

Subsequent to the enactment of the PRWORA, the list of entities that can receive NDNH data has been expanded to include

  • in 1999, the Secretary of Education (to collect student loan debt or grant overpayments, and to conduct analyses of student loan defaults);
  • in 2004, the Secretary of HUD (for employment and income verification for certain HUD housing programs, and to conduct analyses of the employment and income reporting);
  • in 2004, SWAs (to administer a UI program);
  • in 2006, State SNAP Agencies (to administer a SNAP program);23
  • in 2008, the Secretary of the Treasury (to collect delinquent nontax debt owed to the federal government under specified circumstances);
  • in 2008, State Child and Family Services (Title IV-B) Agencies and State Foster Care and Adoption Assistance (Title IV-E) Agencies (to carry out state responsibilities under these titles);
  • in 2017, GAO (to discharge the duties of the Comptroller General under 31 U.S.C. §716);24 and
  • in 2018, the Secretary of Agriculture (for income and employment verification for certain USDA housing programs, and to conduct analyses of the employment and income reporting).

Readers should note that NDNH data that are used by HHS, ED, HUD, and USDA to conduct research or analyses of certain topics (as authorized under the Social Security Act) generally does not contain personal identifiers.25

In addition to the above authorities, the Secretary of Veterans Affairs (VA) has previously been required during two separate time periods to provide the HHS Secretary with information for comparison with the NDNH to determine eligibility for certain veterans' benefits and services.26 The original matching requirements under P.L. 110-157 (enacted December 26, 2007) were to terminate September 30, 2011, but were subsequently extended through November 18, 2011 (P.L. 112-37, enacted on October 5, 2011). During the period from November 19, 2011, through September 29, 2013, the requirements were not in effect. The matching requirements were again effective on September 30, 2013, and for 180 days thereafter (P.L. 113-37, enacted September 30, 2013), but have not been since that time. According to GAO, the VA and OCSE never reached an agreement, reportedly due to "limited financial and workforce resources," that allowed for data sharing outside of either of the time periods when the matching requirements were in effect.27

Selected Policy Issues

The policy issues historically associated with the NDNH generally can be divided into three categories: the use of NDNH data for program integrity and research, privacy and data security, and workers outside the scope of the system (i.e., non-wage workers). These issues are briefly summarized below, along with relevant NDNH proposals in the FY2020 President's budget.

Use of NDNH Data for Program Integrity and Research

The federal government and states administer numerous benefit programs that provide aid to persons with limited income. As discussed above, some of these programs have been given statutory authority to use NDNH data for the purposes of improving program integrity or conducting policy research related to those programs (see "Entities That May Receive NDNH Data" for a list of these authorities).

Many programs that have piloted or fully implemented the use of NDNH data to prevent improper payments have reported significant savings as a result.28 For example, a FY2005 NDNH pilot initiated by the Department of Labor for UI programs in three states found that "using the national cross-match along with the statewide cross-match helped detect 50 percent more cases of potential fraud in one quarter than it would have detected otherwise."29 In addition, SSA estimated in FY2015 that the use of NDNH data (at a cost of about $175 million) for program integrity purposes associated with the SSI, DI, and Ticket programs resulted in program savings of about $923 million.30 Some, however, have raised concerns that programs that might more effectively detect improper payments through the use of NDNH data lack the computer capacity or capability to use that type of automated system.31 Agencies and programs that are administered at the local level might have a limited or nonexistent ability to exchange data regularly with OCSE. Moreover, many of the privacy protections and strict security requirements tied to the NDNH may be administratively burdensome for such agencies.

NDNH data also have been used by policy researchers to help determine the effectiveness of new or existing programs. For example, NDNH wage data were used in a recent study commissioned by HHS to examine whether youths who had participated in the Year Up workforce program experienced increased earnings over a 12-quarter period.32 Some observers, however, have noted that the usefulness of NDNH data for research is limited by its data deletion and de-identification requirements. For example

A one or two year time span provides a relatively limited window for observing earnings before, during, and after the time of program participation. Data of particular interest may have already been deleted before a research agreement can be reached. In the absence of identifiers, it is impossible for researchers to incorporate additional years or sources of administrative data into their research sample or correct problems with prior linkages once the de-identified file with NDNH data has been returned. While it is possible to construct a longitudinal research sample in the future, this requires greater involvement by OCSE (since only OCSE has access to the identifiers needed to continue updating the earnings data), increasing the cost and complexity of the project.33

Privacy and Data Security

The sensitivity of the information contained in the NDNH—personal and financial data on millions of working Americans, as well as those receiving UI benefits—necessitates that precautions be taken with regard to the security of the system.34 Access to the NDNH system (housed at a secure SSA facility) is limited to authorized personnel. In addition, according to the OCSE Guide to the National Directory of New Hires, recipients of NDNH information must agree to comply with security safeguards, such as

Operational safeguards that ensure NDNH information is secure from unauthorized entities and unauthorized uses at all times;

Technical safeguards that ensure NDNH information is processed, stored, and transmitted in a secure manner and that information is processed using methods that protect the confidentiality and integrity of the information; and

Management safeguards that are tailored to the information system environment and require written security agreements, policies, and procedures which must include: notification to OCSE of any breach of NDNH information, and provision that OCSE has the right to request a site visit or assessment to ensure compliance with security requirements.35

In addition to requirements related to the security of the NDNH data while they are in the system or shared outside OCSE, the Social Security Act includes provisions that require the removal or deletion of certain information in the NDNH after specified time periods (see the section on "Data Deletion").

Nevertheless, the size and scope of the NDNH has caused some to be concerned that individual privacy protections might be insufficient and that the type of data that are gathered might gradually be expanded.36 Some have observed that, as an increasing number of federal and state programs have obtained access to the system, wider access to and use of NDNH data could potentially lead to privacy and confidentiality breaches, financial fraud, identity theft, or other crimes.37 Others have expressed related apprehensions that allowing NDNH data to be shared with a variety of federal programs could lead to new reporting requirements that are not necessary to carry out the core CSE mission of the system.38 Those new requirements could be difficult or costly to implement at the state and employer levels, and might cause additional burdens on employers that lead to reduced reporting.39

Non-wage Workers

As a child support tool, the NDNH can be used to locate noncustodial parents and identify wages that could be subject to income withholding. (As previously mentioned, about three-quarters of child support is collected by the CSE program via income withholding.40)

With regard to non-wage employment, the NDNH generally does not gather information on self-employed workers (e.g., independent contractors), which are a growing proportion of the working adult population, according to various estimates.41 A 2019 study identified 16 states that require employers to report the income of independent contractors in some form (in many cases, to the SDNH).42 That study also found low employer compliance with those reporting requirements, and that it was "virtually impossible" to successfully withhold child support from one-time payments to non-wage workers.43 Nevertheless, the CSE staff interviewed for the study felt that independent contractor reporting could improve certain outcomes, such as when that reporting enabled them to locate those parents or attach income withholding orders to regular payments.44

NDNH Proposals in the FY2020 President's Budget

The FY2020 President's budget requested a number of changes to NDNH authorities. With regard to CSE, the budget proposes that businesses or government entities that receive services from non-employees (such as independent contractors) be required to report information about those individuals to the appropriate SDNH. In addition, the budget would allow state CSE programs access to the NDNH for evidence building-related activities (see below for related requested authorities).45

The budget also includes a number of proposed expansions to NDNH data sharing authorities for non-CSE purposes, primarily for "evidence building" (i.e., research) and "program integrity." The research-related proposals include

  • access for unspecified federal agency units that carry out "research, statistical activities, and/or performance measurement that would otherwise require costly surveys, state-by-state memoranda of understanding, or other agreements to obtain the same data contained in NDNH";46
  • access for the U.S. Department of Labor and U.S. Departments of Education to evaluate employment and training programs;47 and
  • access for state agencies that administer workforce or vocational rehabilitation programs to improve program administration, including oversight and evaluation.48

The program integrity-related proposals include

  • access for the Treasury's Do Not Pay Business Center to reduce improper payments when acting on behalf of agencies with statutory NDNH access;49
  • access for the Railroad Retirement Board (RRB) to determine disability benefit eligibility;50 and
  • access for Centers for Medicare and Medicaid Services within HHS for program integrity purposes.

The FY2020 budget request also would mandate that state UI programs conduct cross-matches with the NDNH (instead of giving them the option, as under current law51) to identify individuals who continue to claim UI benefits after returning to work.52

Author Contact Information

Jessica Tollestrup, Specialist in Social Policy ([email address scrubbed], [phone number scrubbed])

Acknowledgment

An earlier version of this report was authored by Carmen Solomon-Fears, a retired Specialist in Social Policy at the Congressional Research Service.

Footnotes

See, for example, the proposal to expand access to and the data collected by the NDNH in Center for Law and Social Policy, CLASP Comments on a Proposed. This proposal would also require state UI programs to use two additional data sources to confirm an individual's eligibility for UI benefits: the State Information Data Exchange System (SIDES, administered by Information Technology Support Center [ITSC] and DOL) and the Prisoner Update Processing System (PUPS, administered by the Social Security Administration). Office of Management and Budget, Fiscal Year 2020 Budget of the U.S. Government, "Analytical Perspectives," p. 88, https://www.whitehouse.gov/wp-content/uploads/2019/03/spec-fy2020.pdf; and DOL, FY2020 Congressional Budget Justification for the Employment and Training Administration: State Unemployment Insurance and Employment Service Operations, p. 21, https://www.dol.gov/sites/dolgov/files/general/budget/2020/CBJ-2020-V1-07.pdf.
1.

Federal law provisions related to the State Directory of New Hires are in Section 453A of the Social Security Act. Federal law provisions related to the National Directory of New Hires are in Section 453(i) and Section 453(j) of the Social Security Act. The National Directory of New Hires, together with the State Directories of New Hires and the federal and state child support case registries, were enacted as part of the 1996 welfare reform law (P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996).

2.

The W-4 form, also called the Employee's Withholding Allowance Certificate, is the form all employees must complete so that employers can withhold the correct federal income tax from each person's paycheck.

3.

Employers are required to submit a wage report of UC-covered employees every three months to the State Employment Security Agency. About 90% of all private employers are covered by UC. The quarterly wage report contains the name, Social Security number, and total wages paid to each employee during the calendar quarter.

4.

U.S. Department of Health and Human Services, Office of Child Support Enforcement, Federal Parent Locator Service, A Guide to the National Directory of New Hires, July 11, 2012, p. 3.

5.

Ibid.

6.

Like the Child Support Enforcement (CSE) program, the NDNH covers people living in the 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.

7.

U.S. Department of Health and Human Services, Administration for Children and Families, Office of Child Support Enforcement, New Hire Reporting-Answers to Employer Questions, July 10, 2013, p. 1.

8.

Christin Durham and Laura Wheaton, Investigating Alternative Sources of Quarterly Wage Data: An Overview of the NDNH, LEHD, WRIS, and ADARE, October 18, 2012, p. 2.

9.

Although quarterly wage data, to a certain extent, duplicate information in the new hires report, quarterly wage data (alone) were not very useful to the CSE agencies. Many noncustodial parents changed jobs so frequently that the quarterly data were often out-of-date before the CSE agencies received the information. Generally, there is about a six-month lag between the time the quarterly wage data are submitted to the State Workforce Agency and when the data are available to the CSE agencies.

10that administers the UI program (generally the SWA).13 The required data elements are the claimant's name, Social Security number, address, benefit amount, and reporting period. Data Verification

The names and Social Security numbers in the NH, QW, and UI data received from the states are transmitted by HHS to the SSA for verification. To the extent necessary, HHS also has the authority to transmit additional information on employees (dates of birth) and employers (tax identification numbers) contained in the NH reports to be verified by the SSA as well. The SSA is required to verify the accuracy of, correct, or supply missing data to the extent possible.14

According to OCSE, all Social Security numbers in NH reports and UI files are verified by the SSA before the information is added to the NDNH database. Some state's QW files, however, do not include all of the elements necessary for a successful verification. In such situations, the information is transmitted to the NDNH but is flagged to indicate that the SSA was not able to verify the Social Security number and name combination.15 Reporting Time Frames

In general, each of the three files that comprise the NDNH have different time frames for reporting and matching. Selected elements of these time frames are summarized below.16

NH data generally are reported on an ongoing basis in the days and weeks after the hire occurs:

  • Generally within 20 days after the employee is hired, employers and federal agencies must provide an NH report on him or her to the SDNH.
  • Within five business days of receipt from an employer, the NH report must be entered into the database maintained by the SDNH.
  • Within three business days after the new hire information from the employer has been entered into the SDNH, the SDNH must submit its NH reports to the NDNH.
  • Within two business days after the NH information is received from the SDNH, the information must be entered into the computer system of the NDNH.

In contrast, QW and UI reporting from the states generally occurs on a less frequent basis:

  • Within four months of the end of a reporting quarter, QW information on existing employees must be transmitted to the NDNH from the SWAs. (For example, January through March data are due no later than July 31.)17 While most states follow this quarterly schedule, some states report QW data on a monthly or weekly basis.
  • Within one month of the end of a reporting quarter, UI information (which comes from SWAs) must be transmitted to the NDNH. (For example, January through March data are due no later than April 30.)
Child Support Enforcement Time Frames

The NDNH is used routinely for various child support enforcement-related purposes. To locate individuals in a paternity establishment case or assist in a case involving the establishment, modification, or enforcement of child support, the HHS Secretary must compare information in the NDNH against information in the child support abstracts in the Federal Child Support Case Registry (another component system of the FPLS) at least every two business days. If a match is found, the HHS Secretary must report the information to the appropriate state CSE agency within two business days.

In addition to locating absent parents, the NDNH can be used to identify wages that could be subject to income withholding. About three-quarters of child support is collected via this method.18 In each case where a CSE agency identifies such wages, it is required to instruct the appropriate employer to withhold child support obligations from the employee's paycheck within two business days (unless the employee's income is not subject to withholding).

Data Deletion

All NDNH data must be deleted from the database no later than 24 months after the date of entry. These deletion requirements, coupled with the reporting schedules outlined in the previous section, result in a constant cycling of wage and employment data into and out of the NDNH.

For CSE purposes, access to QW and UI reports is prohibited starting 12 months after they have been entered if no match has occurred as part of information comparison procedures.

Non-CSE programs and agencies that enter into data matching agreements with OCSE are required to delete the NDNH data that are shared with them on a timeline that is negotiated with OCSE based on the purpose for which the match will be used (e.g., recertification of benefit eligibility). In addition, the HHS Secretary may keep samples of data entered into the NDNH for research purposes that are specified in Section 453(j)(5) of the Social Security Act, but without personal identifiers.

Entities That May Receive NDNH Data

The original purpose of the NDNH was to help states locate child support obligors who were working in other states so that child support could be withheld from the noncustodial parent's paycheck. It is estimated that about one-quarter of child support cases involve noncustodial parents who either live outside the state in which their children reside or have unknown whereabouts.19 The benefit of using the NDNH (as opposed to an individual state's data) is that the system provides nationwide information about noncustodial parents who have obtained work or claimed unemployment insurance benefits, or who are employed by the federal government. Moreover, because many noncustodial parents are in temporary employment or move from job to job, the quick reporting of information on new hires greatly increases the likelihood that the NDNH will be able to locate a noncustodial parent and pass on the information to states so that the CSE agencies can pursue support orders and collect child support via income withholding before the noncustodial parent changes jobs.20

While the NDNH is primarily intended to be a CSE tool that aids in the location of noncustodial parents, several additional programs and agencies have the authority to receive data from it to verify program eligibility, prevent or end improper payments, collect overpayments or ensure that program benefits are properly paid, or conduct research. Although the directory is considered effective, concerns about data security and the privacy rights of employees remain a part of debates regarding expanded access to NDNH data. (These are discussed in the next section.) To safeguard the privacy of individuals in the NDNH, federal law requires that OCSE restrict access to the NDNH database to "authorized" persons. Moreover, the NDNH cannot be used for any purpose not authorized by federal law. Thus, the enactment of law is required for any entity not mentioned in this section to receive NDNH data.

The non-CSE entities authorized to receive NDNH data and the purposes for which it can be received (as of the date of this report) are summarized in Table 1.21 Table 1. Non-CSE Entities Authorized to Receive NDNH Data, and Purposes

Statutory Citation

Entity

Purpose(s)

Legislative History

42 U.S.C. §§653(i)(3) and (j)(9)

Social Security Act §453(j)(3) and (j)(9)

Secretary of the Treasury

To administer Section 32 (earned income tax credit; EITC) of the Internal Revenue Code (IRC), including verification in order to make an advanced payment of the EITC.

To verify a claim of employment in a tax return.

To collect delinquent nontax debt owed to the federal government (e.g., small business loans, Department of Veterans Affairs loans, agricultural loans, etc.) when the debt has been referred to the Secretary of the Treasury in accordance with 31 U.S.C. §3711(g).

EITC and employment verification: P.L. 104-193 (enacted August 22, 1996)

Nontax debt: P.L. 108-447 (enacted in December 8, 2004)

42 U.S.C. §653(j)(3)

Social Security Act §453(j)(3)

State Welfare (Title IV-A or "Temporary Assistance for Needy Families") Agencies

To carry out state responsibilities under programs funded under Title IV, Part A of the Social Security Act.

P.L. 104-193 (enacted August 22, 1996)

42 U.S.C. §653(j)(3)

Social Security Act §453(j)(3)

State Child and Family Services (Title IV-B) Agencies

To carry out state responsibilities under programs funded under Title IV, Part B of the Social Security Act.

42 U.S.C. §653(j)(3)

Social Security Act §453(j)(3)

State Foster Care and Adoption Assistance (Title IV-E) Agencies

To carry out state responsibilities under programs funded under Title IV, Part E of the Social Security Act.

P.L. 110-351 (enacted October 7, 2008)

42 U.S.C. §653(j)(4)

Social Security Act §453(j)(4)

Commissioner of the Social Security Administration (SSA)

P.L. 104-193 (enacted August 22, 1996)

42 U.S.C. §653(j)(5)

Social Security Act §453(j)(5)

HHS Researchers/others

To conduct research found by the HHS Secretary to be likely to contribute to achieving the purposes of Part A or Part D of the Social Security Act (without personal identifiers).

42 U.S.C. §653(j)(6)

Social Security Act §453(j)(6)

Secretary of Education

To collect debt from individuals who have defaulted on student loans or owe an obligation to refund an overpayment of a grant.

To conduct analyses of student loan defaults (after removal of personal identifiers).

P.L. 106-113 (enacted November 29, 1999)

42 U.S.C. §653(j)(7)

Social Security Act §453(j)(7)

Secretary of Housing and Urban Development (HUD)

To verify the employment and income of individuals participating in certain enumerated HUD housing programs.

To conduct analyses of the employment and income reporting of those individuals (after removal of personal identifiers).

P.L. 108-199 (enacted January 23, 2004)

42 U.S.C. §653(j)(8)

Social Security Act §453(j)(8)

State Workforce Agencies (SWAs)

To administer an unemployment compensation program under federal or state law.

42 U.S.C. §653(j)(10)

Social Security Act §453(j)(10)

State Supplemental Nutrition Assistance Program (SNAP) Agencies

To administer SNAP under the Food and Nutrition Act of 2008.

31 U.S.C. §721 note

Government Accountability Office (GAO)

P.L. 115-3 (enacted January 31, 2017)

P.L. 115-334, §6417

Secretary of Agriculture (USDA)

P.L. 115-334 (enacted December 20, 2018)

1.

Federal law provisions related to the State Directory of New Hires are in Section 453A of the Social Security Act. Federal law provisions specifically related to the NDNH (i.e., the national system) are in Sections 453(i) and (j) of the act. The NDNH, together with the State Directories of New Hires and the federal and state Child Support Case Registries, was enacted as part of the 1996 welfare reform law. Other provisions in Section 453 governing the Federal Parent Locator Service (FPLS), of which the NDNH is a component system, may also be relevant.

2.

U.S. Department of Health and Human Services (HHS), Administration for Children and Families (ACF), Office of Child Support Enforcement (OCSE), 15 Facts on Employer New Hire Reporting Child Support Enforcement: A Compilation of Evidence and Experience from the States, February 12, 1997, pp. 1-2.

3.

A putative father is "the person alleged to be the father of the child but who has not yet been medically or legally declared to be the legal father" (HHS, ACF, OCSE, Glossary of Common Child Support Terms, 2013, https://www.acf.hhs.gov/sites/default/files/programs/css/child_support_glossary.pdf).

4.

HHS, ACF, OCSE, Preliminary Data Report for FY2018, Table P-97, https://www.acf.hhs.gov/css/resource/fy-2018-preliminary-data-report.

5.

For a summary of FPLS components, see CRS Report RS22380, Child Support Enforcement: Program Basics, by Jessica Tollestrup.

6.

The NDNH system itself is housed in the Social Security Administration's (SSA's) enterprise data infrastructure.

7.

HHS, ACF, OCSE, Preliminary Data Report for FY2018, Table P-97, https://www.acf.hhs.gov/css/resource/fy-2018-preliminary-data-report.

8.

The W-4 form, also called the Employee's Withholding Allowance Certificate, is the form all employees must complete so that employers can withhold the correct federal income tax from each person's paycheck. Since the enactment of P.L. 112-40, the requirement to report "newly hired employees" has been expanded to include rehired employees who have been separated from employment for at least 60 days.

9.

HHS, ACF, OCSE, National Directory of New Hires Guide for Data Submission, Version 13.3, February 8, 2019, pp. 2-1 and 2-2, https://www.acf.hhs.gov/sites/default/files/ocse/ndnh_guide_for_data_submission.pdf.

10.

States have the option of imposing a civil monetary penalty for the failure of employers to report the required new hire information. The penalty cannot exceed $25 per failure to meet the requirements with respect to each newly hired employee, or $500 if under state law the failure is the result of a conspiracy between the employer and the employee not to supply the required report or to supply a false or incomplete report. Section 453(n) of the Social Security Act allows certain employees of a federal or state agency performing intelligence or counterintelligence functions not to be reported to the new hires directories.

11.

For information on the federal-state UI system, including coverage issues, see CRS Report RL33362, Unemployment Insurance: Programs and Benefits, by Julie M. Whittaker and Katelin P. Isaacs.

12.

HHS, ACF, OCSE, A Guide to the National Directory of New Hires, March 10, 2017, p. 2.

13.

Ibid.

14.

Social Security Act §453(j).

15.

HHS, ACF, OCSE, National Directory of New Hires Guide for Data Submission, Version 13.3, February 8, 2019, pp. 1-5 and 1-6, https://www.acf.hhs.gov/sites/default/files/ocse/ndnh_guide_for_data_submission.pdf.

16.

For a full list of time frames for reporting and matching, see ibid., pp. 2-1, 3-1, and 4-1.

17.

Federal agencies are required to transmit QW information on federal employees to the NDNH no later than one month after the end of a calendar quarter.

18.

HHS, ACF, OCSE, Preliminary Data Report for FY2018, Table P-29, https://www.acf.hhs.gov/css/resource/fy-2018-preliminary-data-report.

19.

Kye Lippold and Elaine Sorensen, Characteristics of Families Served by the Child Support (IV-D) Program: 2010 Census Survey Results, Urban Institute, October 2013, p. 13, https://www.urban.org/sites/default/files/publication/24056/412926-Characteristics-of-Families-Served-by-the-Child-Support-IV-D-Program—Census-Survey-Results.PDF.

20.

Section 454(17) of the Social Security Act requires that all state CSE programs have in effect agreements with HHS for the use of the FPLS, which includes the NDNH.

21.

The Children's Health Insurance Program (CHIP) Reauthorization Act of 2009 (P.L. 111-3), in Section 1942(e), directed the HHS Secretary to enter into data exchange agreements as necessary to permit state programs that meet certain criteria to receive data from the NDNH "relevant to eligibility determinations and determining the correct amount of benefits under a State child health plan under CHIP or a State plan under Medicaid." It does not appear that this provision was ever implemented.

22.

For further information, see SSA matching agreements 1074, 1098, and 1306, https://www.ssa.gov/privacy/computer_matching_programs.html.

23.

The original authority referenced the "Food Stamp" program. P.L. 110-246 changed program references to the "Supplemental Nutrition Assistance Program" (SNAP). P.L. 113-79 required all state SNAP agencies (rather than giving them the option) to data-match with the NDNH at the time of SNAP certification for the purposes of determining eligibility to receive SNAP benefits and determining the correct amount of those benefits. For further information about SNAP data matching with the NDNH, see CRS Report R45147, Errors and Fraud in the Supplemental Nutrition Assistance Program (SNAP), by Randy Alison Aussenberg.

24.

For background, see Department of Justice, Whether the Department of Health and Human Services May Provide the Government Accountability Office Access to Information in the National Directory of New Hires, Memorandum Opinion for the Acting General Counsel, August 23, 2011, https://www.justice.gov/opinion/file/833541/download.

25.

See HHS, ACF, OCSE, "A Guide to the National Directory of New Hires," pp. 4-5.

26.

See Social Security Act §453(j)(11). For background on how the VA anticipated that the requirement to match data with the NDNH might overlap with existing income-verification processes, see the testimony of Daniel L Cooper, Under Secretary for Benefits, U.S. Department of Veterans Affairs, before the Senate Committee on Veterans' Affairs, May 9, 2007, https://www.va.gov/OCA/testimony/svac/07050920.asp.

27.

U.S. Government Accountability Office (GAO), Veterans Disability Benefits: VA Can Better Ensure Unemployability Decisions Are Well Supported, GAO-15-464, June 2015, p. 23, https://www.gao.gov/assets/680/670592.pdf.

28.

See, for example, the discussion of the use of NDNH data to locate TANF recipient workers with unreported income, Wade F. Horn, Assistant Secretary for Children and Families, U.S. Department of Health and Human Services, Testimony before the Human Resources Subcommittee, July 14, 2005, https://www.acf.hhs.gov/olab/resource/wade-f-horn-on-ndnh-and-tanf.

29.

GAO, Improper Payments: Federal and State Coordination Needed to Report National Improper Payment Estimates on Federal Programs, GAO-06-347, April 2006, p. 59, https://www.gao.gov/assets/250/249728.pdf.

30.

See SSA-OCSE Quarterly Match Agreement 1704, p. 46, https://www.hhs.gov/sites/default/files/cma-1704.pdf.

31.

See, for example, the findings with regard to SWA utilization of the NDNH in Department of Labor, Office of Inspector General—Office of Audit, Improved Oversight of States' Use of New Hire Tools Would Help Reduce Improper Payments, report to the Employment and Training Administration, September 27, 2018, 04-18-003-03-315, https://www.oig.dol.gov/public/reports/oa/2018/04-18-003-03-315.pdf.

32.

David Fein and Jill Hamadyk, Bridging the Opportunity Divide for Low-Income Youth: Implementation and Early Impacts of the Year Up Program, HHS, ACF, Office of Planning, Research, and Evaluation, Report #2018-65 (Washington, DC: Office of Planning, Research, and Evaluation, May 2018), https://www.acf.hhs.gov/sites/default/files/opre/pace_8_year_up_narrative_6_1_18_508.pdf.

33.

Christin Durham and Laura Wheaton, Investigating Alternative Sources of Quarterly Wage Data: An Overview of the NDNH, LEHD, WRIS, and ADARE, Urban Institute, October 18, 2012, p. 3, http://www.urban.org/sites/default/files/publication/25971/412688-Investigating-Alternative-Sources-of-Quarterly-Wage-Data-An-Overview-of-the-NDNH-LEHD-WRIS-and-ADARE.PDF.

34.

The NDNH is subject to security and privacy requirements under Sections 453(l) and (m) of the Social Security Act. It also is considered to be a system of records under the Privacy Act, and thus is subject to the requirements under that act for administrative, technical, and physical safeguards for both the records matched and any results of those matches (see 5 U.S.C. 552a).

35.

HHS, ACF, OCSE, A Guide to the National Directory of New Hires, p. 8. See also HHS, ACF, OCSE, Accuracy of Data Maintained by the National Directory of New Hires and the Effectiveness of Security Procedures, Report to the House of Representatives Committee on Ways and Means and Senate Committee on Finance, July 31, 2002.

36.

See, for example, Cato Institute, "'Deadbeat Dad' Database Endangers Everyone," by Doug Bandow, April 30, 1998, https://www.cato.org/publications/commentary/deadbeat-dad-database-endangers-everyone.

37.

GAO, National Sex Offender Registry: New Hires Data Has Potential for Updating Addresses of Convicted Sex Offenders, GAO-06-766, July 2006, p. 26, https://www.gao.gov/products/GAO-06-766. See also U.S. Department of the Treasury, Inspector General for Tax Administration, Hearing before the House Committee on Oversight and Government Reform, Subcommittee on Government Organization, Efficiency, and Financial Management, Problems at the Internal Revenue Service: Closing the Tax Gap and Preventing Identity Theft, Testimony of the Honorable J. Russell George, Treasury Inspector General for Tax Administration, April 19, 2012, https://www.treasury.gov/tigta/congress/congress_04192012.pdf.

38.

P.L. 104-193 allows certain employees of a federal or state agency performing intelligence or counterintelligence functions to not be reported to the new hires directories (Section 453(n) of the Social Security Act). States have the option of imposing a civil monetary penalty for the failure of employers to report the required new hire information. The penalty cannot exceed $25 per failure to meet the requirements with respect to each newly hired employee, or $500, if under state law the failure is the result of a conspiracy between the employer and the employee to not supply the required report or to supply a false or incomplete report.

11.

For information regarding extending the access to the NDNH for research purposes (with personal identifiers), see MDRC, Testimony of Gordon L. Berlin, President, MDRC, before the House Ways and Means Subcommittee on Human Resources, Improving Access to Federal Data for More Efficient Evaluations, March 20, 2012, http://www.mdrc.org/publication/improving-access-federal-data-more-efficient-evaluations.

12.

U.S. Department of Health and Human Services, Administration for Children and Families, Office of Child Support Enforcement, Accuracy of Data Maintained by the National Directory of New Hires and the Effectiveness of Security Procedures, Report to the House of Representatives Committee on Ways and Means and the Senate Committee on Finance. July 31, 2002.

13.

Federal employers send their new hire reports directly to the National Directory of New Hires (generally within 20 days after an employee is hired).

14.

U.S. Department of Health and Human Services, Office of Child Support Enforcement, Federal Parent Locator Service, A Guide to the National Directory of New Hires, July 11, 2012, p. 4.

15.

Ibid.

16.

See the following sections of the Social Security Act for additional information: 453(j)(3), 453(j)(4), 453(j)(5), and 453(h)(3). Note that Section 105 of P.L. 110-351 (enacted October 7, 2008) added the Title IV-B and Title IV-E programs to the list of programs that have access to the National Directory of New Hires and other FPLS databases.

17.

See Section 453(j)(6) of the Social Security Act.

18.

See Section 453(j)(7) of the Social Security Act.

19.

See Section 453(j)(8) of the Social Security Act.

20.

See Section 453(j)(9) of the Social Security Act.

21.

See Section 453(j)(10) of the Social Security Act.

22.

See Section 11(e)(24) of the Food and Nutrition Act of 2008 (7 U.S.C. 2020(e)(24)).

23.

See Section 453(j)(11) of the Social Security Act.

24.

Most recent published data available.

25.

Center for Law and Social Policy, CLASP Comments on a Proposed Postsecondary Institution Rating System, Submitted to the U.S. Department of Education, January 31, 2014. p. 5, http://www.clasp.org/resources-and-publications/publication-1/CLASP-Comments-on-PIRS-2-4.pdf.

2639.

Vicki Turetsky, Preserve the Child Support System: Don't Let the New Hire Database Be Hijacked for Immigrant Employment Verification, Center for Law and Social Policy, May 6, 2008; National Women's Law Center, Impact of the New Employee Verification Act (HR 5515) on Child Support Enforcement, written statement of Joan Entmacher to the Subcommittee on Social Security, House Committee on Ways and Means, May 8, 2008, https://nwlc.org/wp-content/uploads/2015/08/NWLConNEVAandChild%20Support.pdf.

40.

Ibid., Table P-29.

41.

Lawrence F Katz and Alan B. Krueger, "The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015," ILR Review, vol. 72, no. 2 (March 2019), pp. 382-416; and CRS Report R44365, What Does the Gig Economy Mean for Workers?, by Sarah A. Donovan, David H. Bradley, and Jon O. Shimabukuro.

42.

These state-level requirements have differing income thresholds and a variety of other qualifying criteria for the reporting. See Asaph Glosser and Justin Germain, Independent Contractors and Nontraditional Workers: Implications for the Child Support Program, HHS, Office of the Assistant Secretary for Planning and Evaluation, May 10, 2019, https://aspe.hhs.gov/system/files/pdf/261736/IndependentWorkersChildSupportProgram.pdf.

43.

Ibid., p. 6.

44.

Ibid., pp. 7-8. See also National Child Support Enforcement Association, "Resolution Supporting New Hire Reporting and Income Withholding Changes for Independent Contractors," August 10, 2019.

45.

HHS, ACF, Justification of Estimates for Appropriations Committees FY2020, p. 227, 228, and 330, https://www.acf.hhs.gov/sites/default/files/olab/acf_congressional_budget_justification_2020.pdf.

46.

Office of Management and Budget, Fiscal Year 2020 Budget of the U.S. Government, "Analytical Perspectives," p. 63, https://www.whitehouse.gov/wp-content/uploads/2019/03/spec-fy2020.pdf.

47.

Ibid., p. 63.

48.

HHS, ACF, Justification of Estimates for Appropriations Committees, pp. 228 and 330.

49.

Department of the Treasury, Bureau of the Fiscal Service, Congressional Budget Justification and Annual Performance Report and Plan FY2020, p. 10, https://home.treasury.gov/system/files/266/14.-FISCAL-FY-2020-CJ.pdf.

50.

RRB, Justification of Budget Estimates FY2020, p. 72, https://rrb.gov/sites/default/files/2019-03/JBE20.pdf.

51.

While no statutory requirement under current federal law specifically mandates the use of NDNH by state UI programs, in 2011 DOL issued program guidance to states mandating the use of NDNH for this purpose (citing several existing statutory authorities). For details, see DOL, Employment and Training Administration (ETA), Unemployment Insurance Program Letter, UIPL 19-11, "National Effort to Reduce Improper Payments in the Unemployment Insurance (UI) Program," June 10, 2011, https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3036.

52.

See Section 453(m) of the Social Security Act. According to an OCSE document: "The NDNH is housed at the secure Social Security Administration (SSA) facility with access limited to authorized personnel. Data extracts authorized by legislation are made by batch processes and transmitted securely to recipients. All data recipients must agree to the OCSE Security Addendum to the Memorandum of Understanding that prescribes the protections that must be afforded the data. When used for research purposes (as authorized by the Secretary of HHS), disclosure is limited to data without personal identifiers under section 453(j)(5) of the Act. In addition, each state must have in effect safeguards designed to protect privacy rights. All state data is transmitted over secure lines to the NDNH." (Source: U.S. Department of Health and Human Services, Administration for Children and Families, Office of Child Support Enforcement, Supporting Statement for OMB Clearance: National Directory of New Hires, OMB no. 0970-0166, Revised May 2010, p. 10. See also: U.S. Department of Health and Human Services, Office of Child Support Enforcement, Federal Parent Locator Service, A Guide to the National Directory of New Hires, July 11, 2012, p. 7.

27.

Center for Law and Social Policy, Preserve the Child Support System: Don't Let the New Hire Database be Hijacked for Immigrant Employment Verification, by Vicki Turetsky, May 6, 2008.

28.

See earlier subsection on "Data Deletion Requirements."

29.

U.S. Government Accountability Office, National Sex Offender Registry: New Hires Data Has Potential for Updating Addresses of Convicted Sex Offenders, GAO-06-766, July 2006, p. 26. See also: U.S. Department of the Treasury, Inspector General for Tax Administration, Hearing before the House Committee on Oversight and Government Reform, Subcommittee on Government Organization, Efficiency, and Financial Management, Problems as the Internal Revenue Service: Closing the Tax Gap and Preventing Identity Theft, Testimony of the Honorable J. Russell George, Treasury Inspector General for Tax Administration, April 19, 2012.