FW: NSHHRA Update re Nebraska New Hire Reporting Act - please send to the membership.

Nebraska New Reporting Requirements Now Include Independent Contractors

Effective January 1, 2010, the definition of "employee" under the
Nebraska New Hire Reporting Act, for the first time, expressly included
"independent contractors." Nebraska law requires all employers to report
any newly hired or rehired employees, including, their name, address,
social security number, and the date of hire or rehire, within 20 days
of the date of hire or rehire. Nebraska employers should now perform
new hire reporting when hiring independent contractors. This is
required regardless of how little money is involved because there is no
de minimis standard like the $600 threshold for 1099-MISC. Also,
independent contractors who are paid after January 1, 2010 need to be
reported, regardless of how long the employer has done business with the
contractor in the past.

For reasons unknown the Nebraska amendment adding "independent
contractor" to the definition of "employee" did not include a definition
of the term "independent contractor." Other states have expressly
adopted such a definition, and the Nebraska's website
(www.nenewhire.com/) describes an independent contractor using the
definition used by other states as "an individual who provides goods or
services to an employer under terms specified in a contract or within a
verbal agreement for compensation that is reported as income other than
wages and who is an individual, the sole shareholder of a corporation,
or the sole member of a limited liability company." However, Nebraska
did not adopt that language in its statute, and there are no current
regulations addressing this oversight. Therefore, the language of the
law requires broad reporting, and employers must report hiring or
rehiring any contractor providing goods or services for compensation,
with nothing in law expressly limiting that to individuals, sole
proprietors, or single member corporations or LLCs.

Submitting a copy of an employee's W-4 form, with a notation of the date
of hire or rehire, is typically be sufficient for the requirements of
this Act. However, employers may now want to use the new federal Form
W-9 which has been revised to now require such independent contractor
service providers to list their first and last names, and FEIN or SSN.
Importantly, employers need to submit their reports using the social
security number of self-employed individuals, even if they operate with
a company having a FEIN. Therefore, while employers should ask
independent contractors to complete the new Form W-9, if the
individual's social security number is still not known after reviewing
the W-9, the employer should ask the independent contractor for it. If
refused, the employer is probably best to decline to hire the
contractor.

Employers are advised to seek advice from their attorney on how to
proceed given the myriad unanswered questions arising from this
amendment.

<http://www.knudsenlaw.com/Att_Bio_KRM.htm>
<http://www.knudsenlaw.com/>

Kevin R. McManaman

krm@knudsenlaw.com <mailto:krm@knudsenlaw.com>

Knudsen, Berkheimer, Richardson & Endacott, LLP

3800 VerMaas Place, Suite 200

www.knudsenlaw.com

Lincoln, NE 68502

402/475-7011 (office)

402/475-8912 (fax)

402/440-2982 (cell)