Most businesses try to grow – at least somewhat. However, to grow or to step away from the business for a personal life, vacation, or other ventures, you’ll need help with day-to-day operations. If you’ve never hired someone before – or it’s been a long time – don’t worry – here’s the information you need to get started.
Comply with Federal & State Regulations
Hiring a new employee means complying with federal and state regulations. Although the following list may seem long, it won’t be a daunting process when you have our help.
Here’s an overview of what’s generally required. Please check out the U.S. Small Business Association (SBA) or call our office for help. We commonly walk businesses like yours through the hiring process.
Obtain an Employer Identification Number (EIN)
Often called an Employer Tax ID or Form SS-4, this nine-digit number is issued by the U.S.Internal Revenue Service (IRS) and used when paying taxes or reporting information to state agencies.
Keep Records
The IRS requires employers to keep the following employment tax records for at least four years: 1) federal income tax withholding, 2) federal wage and tax statements, and 3) state wage and tax statements. Additional records may be required.
See the IRS Employer Tax Guide and the IRS State Government Website links for specifics.
Verify Employee Eligibility
All employers must verify an employee’s eligibility to work in the United States. This is done via the I-9 form that can be obtained and filed online or completed using the paper form. Verification must be completed within three days of employment and kept on file for three years.
Register with Your State's New Hire Reporting Program
All employers must report new and re-hire employees to their state’s New Report Hiring System. The U.S. Department of Health & Human Services (DHHS) publishes a list of state new hire reporting websites.
Obtain Workers' Compensation Insurance
All employers must carry workers’ compensation insurance when they have employees. The insurance can be obtained through a commercial carrier, through their state’s workers’ compensation program, or on a self-insured basis (where the employer assumes the financial risk for providing benefits to employees).
Post Required Notices
Employers must display posters in their workplace that tell employees of their employer’s responsibilities and employees’ rights. For example, you must use posters identifying federal and state minimum wage (Fair Labor Standards Act, “FLSA”), equal employment opportunity (“EEO”), and safety (Occupational Safety & Health Administration, “OSHA”).
File Your Taxes
Employers who pay wages are generally subject to taxes and income tax withholding, Social Security, and Medicare taxes. The specific form(s) needed depends upon the facts and circumstances of your situation.
Discuss your situation with our experienced business law attorneys to make sure you’re in federal and state compliance. Failing to do so could cause unnecessary fines, fees, and litigation.
NOTICE: The information on this website does not constitute legal advice. You should not rely on any information without seeking the advice of a competent attorney licensed to practice in your jurisdiction. This website is both a communication and/or solicitation as defined by California Rules of Professional Conduct, rule 1-400. For further information, please click here.
