Effective October 1, 2021, Florida employers will have to report new independent contractors in a similar way they report new hires to the state. The law, passed earlier this year as Florida Senate Bill 1532, is trying to strengthen child support collections in the state. Here’s how it works.
“Service recipients” (those engaged in a trade or business, who receive services from an individual) will be required to file a report to the Florida Department of Revenue’s State Directory of New Hires if they pay them over $600 in one calendar year. Name, address, social security number (or other number assigned by the IRS), and the date of first services for payment will need to be included along with the employer’s information. This must be done within 20 days after the earlier of: the date of first payment or the date on which a contract providing for payments is entered into.
What does this mean for employers? While we have continued to talk about not treating independent contractors like employees, the State of Florida is now requiring us to do just that. In the end, this will help ensure child support payments are being made.
However, it is just as important that employers update their procedures regarding New Hire Reporting for employees and independent contractors. Many employers rely on their payroll providers to report their newly hired employees, however they are not going to do that for your contractors. In addition, contractors are not always brought in through human resources. My recommendation is that companies set up a process for onboarding contractors that flows through HR to ensure proper reporting.
Here is the link to learn more about your new reporting responsibilities:
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