Documentation Requirements for Newly Hired Employees

It is the policy of the State of North Carolina that appropriate documentation must be obtained by the employing state entity prior to placing an employee on the payroll system. Requirements vary and are based on the appointment type and on agency discretionary practices. The three categories for newly hired employees are:

• Permanent (EPA and SPA) employees (full-time and part-time)
• Temporary hourly employees
• Personal service contractors

G.S. 126 State Personnel System

G.S. 143B-426.39 Powers and Duties of the State Controller

US Citizenship and Immigration Services Employer Information Bulletin 102

IRS Publication 15 Circular E Employers Tax Guide

Required Forms for Permanent Employees

The documentation required to add new permanent employees to the payroll system is listed below.

• PD-105 Personnel Action form (which includes information concerning any foreign national tax status)
• W-4 Employee's Withholding Allowance Certificate form
• NC-4 Employee's Withholding Allowance form (for North Carolina residents)
• I-9 Employment Eligibility Verification form
• Copy of documents verifying employment eligibility (see instructions for Form I-9)
• Miscellaneous deductions forms
  Not all agencies offer the same deduction options.  Employees should contact their Personnel Office for valid options.  A list of elective employee deductions from which agencies may select as valid for their employees us available at:

http://www.ncosc.net/sigdocs/sig_docs/payroll/frame_test.html

Except for the I-9 form and its supporting documents, hiring documentation is submitted to the agency Payroll Office by the Personnel Office.

Required Forms for Temporary Employees

The documentation required to add new temporary employees to the payroll system is listed below.

• PD-105 Personnel Action form (which includes information concerning any foreign national tax status)
• W-4 Employee's Withholding Allowance Certificate form
• NC-4 Employee's Withholding Allowance form (for North Carolina residents)
• I-9 Employment Eligibility Verification form
• Copy of documents verifying employment eligibility (see instructions for Form I-9)
• Timesheet with appropriate approval signatures

Except for the I-9 form and its supporting documents, hiring documentation is submitted to the agency Payroll Office by the Personnel Office.

The documentation required to add personal service contractors to the payroll system is submitted to the agency Payroll Office by the Personnel Office.  The Personnel Office is responsible for verifying that the contractor is not a current employee of another state agency and that a dual employment situation does not exist as well as whether the personal service contractor is classified as a foreign national.  It is also the responsibility of the Personnel Office to retain the requisite I-9 form for the legal retention period.  The requisite documentation and authorizations needed to place a personal service contractor on the payroll include the following:

• PSC-1 Request for Payment of Personal Service Contractor form with appropriate approval signatures (which includes information concerning any foreign national tax status)
• W-4 Employee's Withholding Allowance Certificate form
• NC-4 Employee's Withholding Allowance form (for North Carolina residents)
• I-9 Employment Eligibility Verification form
• Copy of documents verifying employment eligibility (see instructions for Form I-9)
• Timesheet with appropriate approval signatures (if applicable)

Personal service contractors are not recorded on the State Personnel System and all required documentation is forwarded to the Payroll Office except the I-9 form and its supporting documents.  For contractors that are identified as foreign nationals, the Personnel Office is required to complete the Nonimmigrant Category section of the PSC-1 form prior to forwarding it to the Payroll Office.

Because personal service contractors are not processed on the Personnel System, it is critical that the Payroll Office notify Personnel when a personal service contractor is terminated.  Notice of the termination allows the Personnel Office to determine the retention period for the contractor’s I-9 form.

Samples of each of the forms listed above, except the I-9 and time sheet forms, are available at:

http://www.ncosc.net/sigdocs/sig_docs/payroll/Payroll_Forms.html 

The I-9 form can be accessed at the following site:

Tax Withholding Policy for New Hires

New employees that do not complete  W-4 and NC-4 forms for submission to the Payroll Office are placed on the payroll with the maximum withholding amount, single with no exemptions (S-00).

Special Documentation Requirements for Foreign Nationals (Aliens)

The Personnel Office is responsible for determining a newly employed alien’s tax withholding status.  The first step is defining whether the employee is a resident or nonresident alien.  Procedures for making this determination are available online at the following web site:

http://www.ncosc.net/sigdocs/sig_docs/prev_memos/2005/Foreign_Nationals-Payments_Policy_Procedures_Final_82504.pdf

Once the determination is made, additional documentation (listed below) is processed by the Personnel Office.  However, the only documentation regarding foreign nationals that is forwarded to the Payroll Office is the PD-105 form, which references any foreign national tax status in the comments section of the form.

Resident Aliens: In addition to the standard documentation required for other new employees, the following documents are required by the Personnel Office for the employment of resident aliens: 

• Form W-9, Request for Taxpayer Identification Number and Certification, or

• Form W-9, Modified to Claim Tax Treaty Benefits by a US Person

Nonresident Aliens:  In addition to the standard documentation required for other new employees, the following documents are required by the Personnel Office for the employment of nonresident aliens:

• Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, or

• Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual

More information related to the taxation of Foreign Nationals is covered in the Payroll Tax section of this manual.

This policy applies to all State entities.

There are no exceptions to this policy.

There are no special terms for this policy.