The employer needs to know the complete address of the employee for a number of reasons. One is for payroll purposes. Setting up an account for a person requires him to provide his address. Another reason is that if something wrong happens, they would know where to locate him or his family. The company also needs an employees address so that they can be certain of his identity. And another reason would be for mailing of anything necessary purposes.
When employment starts, so does the employer-employee relationship. This type of relationship is defined by the kind of contract the employee has in the company. It revolves around the things they talk about and disclose to each other before the start of the employment. And before such employment, it is necessary that the company has certain basic information about the employee. This is basically for accountability purposes and for the sake of having a complete and uniform record of all employees.