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X12 transaction guide · Government and regulatory

EDI 540 Notice of Employment Status

The X12 document used to notify government agencies or authorized parties of new hires, terminations, or confirmed employment status.

Sent by
Employer or payroll provider
Received by
Government agency or authorized party
Standard
ANSI ASC X12

What is an EDI 540?

The EDI 540 Notice of Employment Status is the ANSI X12 transaction set used to notify government agencies or authorized parties of the identity of newly hired employees, of the termination of employees, or to confirm employment status. It may also convey related information.

New hire reporting supports programs such as child support enforcement and unemployment insurance integrity, and employers must report within legal deadlines. Payroll providers that report for many employers benefit from a standard electronic format. It also supports confirmations.

How the EDI 540 worksDiagram of the EDI 540 Notice of Employment Status. Employer or payroll provider sends it to government agency or authorized party. It usually starts the exchange. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment) and detail: the required NM1 loop with NM1 (Individual or Organizational Name) and the required ENT loop with ENT (Entity). 1 optional loops are listed by their first segment.How the EDI 540 worksNotice of Employment Status: who sends it, where it fits and what the standard marks required1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeEDI 540SENDEREmployer or payrollproviderRECEIVERGovernment agency orauthorized party997 or 999 acknowledgment back, if the partners agreeUSUALLY FOLLOWED BY997FunctionalAcknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDsISA … IEAFunctional group, ID code ESGS … GETransaction set 540ST … SEHEADINGBGNBeginning Segment+ 1 optional loop, starting with:N1DETAILRequired loop NM1 · repeats many timesNM1Individual or Organizational NameRequired loop ENT · repeats many timesENTEntityBlue box: required loop. Optional loops are listed by the segment that starts them; when a loop is used, that first segment is required. Optional segmentsoutside loops are not drawn.Structure: required segments and loops in the X12 008010 listing for the 540. Your trading partner's implementation guide adds its own requirements.
How the EDI 540 worksDiagram of the EDI 540 Notice of Employment Status. Employer or payroll provider sends it to government agency or authorized party. It usually starts the exchange. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment) and detail: the required NM1 loop with NM1 (Individual or Organizational Name) and the required ENT loop with ENT (Entity). 1 optional loops are listed by their first segment.How the EDI 540 worksNotice of Employment Status: who sends it,where it fits and what the standard marksrequired1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeEDI 540SENDEREmployer orpayroll providerRECEIVERGovernmentagency orauthorized party997 or 999 acknowledgment back, if the partnersagreeUSUALLY FOLLOWED BY997Functional Acknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDs (ISA… IEA)Functional group, ID code ES (GS … GE)Transaction set 540 (ST … SE)HEADINGBGNBeginning Segment+ 1 optional loop, starting with:N1DETAILRequired loop NM1 · repeatsmany timesNM1Individual orOrganizational NameRequired loop ENT · repeatsmany timesENTEntityBlue box: required loop. Optional loops are listedby the segment that starts them; when a loop isused, that first segment is required. Optionalsegments outside loops are not drawn.Structure: required segments and loops in the X12008010 listing for the 540. Your trading partner'simplementation guide adds its own requirements.

How to read this diagram: the top row shows who sends the 540, to whom, and which documents usually come before and after it. The lower part shows what X12 release 008010 itself requires: the envelopes around the 540 and the segments and loops the standard marks as required, area by area. Optional loops are listed by the segment that starts them rather than drawn in full. This is the standard's minimum, not a trading partner's requirement: each partner's implementation guide usually makes some optional loops mandatory, restricts the codes and may use a different release.

Expand diagram Download SVG

When it is used

  • Reporting new hires to state agencies
  • Reporting terminations
  • Confirming employment status on request

Where it fits in the document flow

This document 540 Notice of Employment Status
Usually followed by 997 Functional Acknowledgment

Structure

Mandatory segments in the 540 (X12 release 008010)

The segments X12 release 008010 marks as mandatory at their level, in order. Segments inside optional loops are needed only when the loop is used. This is the standard's requirement, not your trading partner's: each partner's implementation guide names the release it uses, adds the optional segments it requires and restricts the values. The requirement status comes from one published X12 reference listing and has not been checked against a second source.

  • ST
  • BGN
  • N1
  • NM1
  • ENT
  • SE

Practical example

The 540 in practice

A payroll provider reports new hires for its client employers. Each week it sends the state agency a 540 listing every new employee with identifying details, the employer and the hire date. The agency matches the hires against its programs.

Implementation

Implementation considerations for the 540

  • Meet the legal reporting deadlines for new hires.
  • Protect employees' personal data under applicable law.
  • Check which formats each agency accepts.
  • Reconcile new hire reports with payroll records.

How ECOM helps

Automate the 540 with ECOM

Solution

Enterprise Integration

Any-to-any integration across partners, systems, protocols, security requirements, formats and ERPs, in batch or real time.

Solution

EDI Integration

Exchange X12 and EDIFACT documents with partners and integrate them directly with your ERP.

Solution

B2B Integration

Connect every customer, supplier, carrier and bank across EDI, API, file and portal channels.

More general questions about EDI are answered in the EDI FAQ.

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