If you are hiring your first employee, big congrats! Things to think about when prepping to hire your first employee include filing documents with and paying taxes to a variety of government agencies. I am a strong supporter of growing your business legally and responsibly.
At the outset, there are generally 15 legal action items for new employers to execute. Many businesses have individual requirements to ensure compliance. And requirements vary in different states. I keep the following checklist as a starting point for the new employer, and this usually applies to most businesses and industry-wide.
- Obtain an employer identification number.
- Register with your state's labor department.
- Set up payroll to withhold taxes.
- Report each new employee to your state's new hire reporting agency.
- Post required notices.
- File IRS Form 940 (yearly).
- Adopt OSHA compliance workplace safety measures.
- Create a custom employee handbook with your company's policies.
- Create personnel files that include job-related documents.
- Set up any employee benefits that you are planning to establish and offer.
- Have each employee fill out IRS Form W-4, Withholding Allowing Certificate.
- Apply for worker's compensation insurance.
- Provide copies of various company policies (including employee handbook), and obtain signed verifications from your new employee.
- Fill out Form I-9, Employment Eligibility Verification for each new employee.
- Check your specific state specific requirements.
Please keep in mind that there are different considerations involved in hiring Independent Contractors.
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Photo by: Kristen Booth, www.kristenbooth.net