Alabama Department of Labor

New Hire Program Capabilities Expanded

Thanks to the National Directory of New Hires (NDNH), the Alabama New Hire Program has greatly improved capabilities. With information gathered from all 50 states, NDNH not only expands the amount of information available to detect potential overpayments (fraudulent and non-fraudulent), but also allows Alabama to match in-state new hire records faster.

NDNH is a centralized, automated repository of approximately 1.35 billion records on employment, unemployment insurance, and quarterly wage information. NDNH data matching helps stop or limit the overpayment of Unemployment Insurance (UI) benefits to claimants who fail to report new employment, improves fraud-detection efforts, and, ultimately, protects the Alabama UI Trust Fund. UI programs nationwide are implementing this program after successful pilot projects in several states.

Under NDNH, employers report information on newly-hired employees to the state child support agencies. The state then forwards the information, along with quarterly wage and unemployment insurance records, to NDNH. Cross-matching information in the NDNH database with unemployment insurance records allows Alabama Department of Labor to detect if a person has gone to work almost anywhere in the United States, but is continuing to claim Alabama unemployment benefits.

“As with other monitoring efforts, the data-matching program is dependent on assistance from employers,” says James A. Webb, UC Division director. “We are continuing to place an emphasis on follow-up phone calls to employers to verify new hire start dates, in order to ensure UI benefits are discontinued for claimants who are employed. By assisting Labor with this information, employers are saving the Alabama UI Trust Fund thousands of dollars.”

Alabama's New Hire program dates back to 1994 when reporting a newly hired or a recalled worker was performed strictly on a voluntary basis. As a result of the Federal Welfare Reform Act of 1996, the Alabama New Hire program became state law in 1997.

According to Alabama Law, Act No. 97-228, employers are required to:

• Report to Labor, within seven days of hiring, each new hire, recall, or rehire.
• Information reported shall include the name, address, social security number, and date of each hire.
• Information is to be reported on forms supplied by the department or other approved methods, including the Internet.

Once this information is collected, Labor is required by law to enter the data into our computer system, match the data with our records, and then submit the data to the Alabama Department of Human Resources in a timely manner. Information from employers is not placed on the “back burner,” but is given top priority.