You have done a great job by hiring your first employee. Being an employer means ensuring you follow all legal requirements, starting off on the right foot. Employing brings with it a number of new obligations, such as filing tax forms and registering with government agencies, as well as insurance requirements. In this article, we will be guiding you about everything you need to do when hiring your first employee.
Things You Need to Do When Hiring Your First Employee:
Here are 13 things you need to do when hiring your first employee
- Get an EIN (Employer Identification Number).
For tax returns and other IRS documents, you must obtain an employer identification number (EIN) when you hire employees. IRS Form SS-4 must be submitted to get an EIN. Visit the website of the IRS at www.irs.gov to download the form.
- Make Sure You Register with Your State’s Labor Department.
The state will tax you on unemployment compensation once you hire employees. Workers who lose their jobs receive these payments through an unemployment compensation fund in their state. A list of state unemployment insurance tax agencies can be found on the Department of Labor’s website.
- Worker Compensation Insurance is a Must
Employees who are injured at work are protected by workers’ compensation insurance. Most states require employers to carry workers’ compensation insurance. However, some make exceptions for small employers.
- Tax Withholding Should be Integrated into the Payroll System
The IRS will require you to withhold and deposit a portion of your employees’ income, as well as withhold Social Security and Medicare taxes from their earnings. You can find more information at www.irs.gov by clicking on IRS Publication 15, Circular E, Employer’s Tax Guide.
- Make sure that Each Employee Completes IRS Form W-4, Withholding Allowance Certificate.
The W-4 form is used to inform employers of how many allowances an employee claims for tax purposes so that you can withhold the right amount of tax from their paychecks. It does not need to be filed with the IRS. You can find this form at www.irs.gov. If an employee wants to change their allowances, they should complete a new W-4 form each year.
- Obtain the Employment Eligibility Verification form I-9 for each New Employee
In order to verify that employees are eligible to work in the United States, employers are required to complete this form by the U.S. Citizenship and Immigration Services (USCIS). This form does not need to be filed with the USCIS, but it must be kept in your files for three years and must be accessible for inspection by ICE officials. It can be obtained from the USCIS website at www.uscis.gov. Forms filled out by all employees should be kept in a single I-9 folder, not in each employee’s personnel file.
- New Hires Should be Reported to Your State’s Agency for New Hire Reporting.
To locate parents who owe child support, the new hire reporting program requires employers to report information about all new employees. There are various agencies that handle new hire reporting. Visit the Administration for Children & Families website (www.acf.hhs.gov ) to learn who your state’s new hire reporting agency is and how to contact them.
- Display Notices in Your Workplace
Employers must post notices about employee rights as a requirement of several government agencies. Your workplace poster must comply with the DOL’s “Poster Advisor.”. You also need to meet any requirements established by your state. The website of the federal Department of Labor contains a list of state labor departments.
- Every year, Complete IRS Form 940
Any time an employee works for you for more than 20 different weeks during a year, you are required to file IRS Form 940 to report your federal unemployment tax. This form is available on the IRS website.
- Put Safety Measures in Place at Your Workplace
A common requirement of the Occupational Safety and Health Act (OSHA) is that employers provide a safe workplace, train employees, notify government officials of serious workplace accidents, and maintain detailed safety records. Occupational Safety and Health Administration can provide information on these regulations at www.osha.gov.
- Develop an Employee Handbook Describing Your Policies
It is a great idea to have a handbook explaining your business’s employee policies and establishing clear terms of employment, such as that employees are at will unless they sign a written employment contract.
- Establish a Personnel File for Each Newly Hired Employee
For each employee, establish a file where you can keep job-related paperwork like job applications, offers of employment, IRS Form W-4s, and benefits enrollment paperwork. It is recommended that medical records be kept in a secure, confidential file. Additionally, you should keep separate files for the I-9 forms, which confirm an employee’s immigration status.
- Establish Employee Benefits Program
Your company needs an employee benefits enrollment process so employees can enroll, name dependents, and select options for their health insurance or 401(k) plan.
If you face any difficulty in filing documents for your first employee, you can contact your Employment Lawyer at Siman Law Firm in Los Angeles.