Florida’s New Reporting Requirement Forces Businesses to Track Payments to Individual Contractors

Did you know that Florida businesses must report individual independent contractors who are paid $600 or more in a calendar year? As of October 1, 2021, these individual contractors must be reported to the Florida Department of Revenue’s State Directory of New Hires. This new statutory reporting requirement was enacted to help Florida’s Child Support Program identify individuals who owe child support and initiate income deduction proceedings when appropriate.

Florida’s new reporting requirement applies to those engaged in a trade or business who pay an individual (who is not an employee) for services rendered in the course of such trade or business. These “service recipients” must report non-employee individuals who are paid $600 or more in a calendar year. Service recipients report these individuals to the State Directory of New Hires the same way employers report newly hired employees.

Service recipients have 20 days to report individual contractors. The 20-day period begins on the date of the payment that triggers the reporting requirement or the date on which a contract providing for such payments is entered into, whichever is earlier. In the absence of a contract, the trigger date is the date on which the total payments to an individual independent contractor equal or exceed $600 during the calendar year. This can be the date of the first payment if the amount is $600 or more. But, if your business pays an individual $100 on the first of each month, then the trigger date would be June 1^st.

When reporting individual independent contractors pursuant to the new law, businesses must provide:

• the individual’s name, address and social security number (or other identifying number assigned by the IRS);
• the date services for payment were first rendered by the individual; and
• the business’s (service recipient’s) name, address, and employer identification number.

This information is submitted online via Florida’s New Hire Reporting Center. Fortunately, the process for reporting individual contractors is no different than the process for reporting newly hired employees. Businesses with employees should already have an online account. Those that don’t will need to register for a new account.

While Florida’s new reporting requirement may make it easier to pursue those with past due child support, it’s still a new requirement. Unfortunately, novelty and uncertainty always increase the likelihood of mistakes. In addition to proceeding cautiously, businesses need adequate insurance to protect against potentially costly errors, including Employment Practices Liability Insurance.

The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.