Hiring your first staff may be both thrilling and terrifying because legal requirements for hiring employees are not always easy to handle. Multiple stages must be followed, including confirming a possible candidate’s identification and acquiring the necessary insurance, among others.
The following are the legal prerequisites for employing an employee for your company.
Apply for an EIN
You must get a tax ID for your firm, also known as a federal Employee Identification Number, before you may add an employee to your payroll (EIN). On the IRS website, businesses may apply for an EIN. As the applicant, you’ll need a form of personal taxpayer identification, such as a social security number, as well as basic corporate information, such as the corporation’s status.
Register with your state’s unemployment insurance office
According to the United States Department of Labor, firms that employ at least one person for 20 weeks in a calendar year or whose employees’ earnings total more than $1,500 each quarter must pay both federal and state unemployment taxes. Your company will first register with the state unemployment insurance agency, then record your employees’ quarterly earnings and pay quarterly unemployment taxes online.
Verify your candidates’ eligibility to work
You must verify a new employee’s identification using the I-9 form from the US Citizenship and Immigration Services before you can formally onboard them. Your potential recruit will supply identifying information such as their social security number and citizenship status, as well as copies of approved identification papers. It is up to you or your HR staff to verify the authenticity of these papers. After the employee is employed, save these I-9 paperwork for at least three years.
Consider running background checks
A background check is an optional aspect of the recruiting process that can give you with extra information about your prospects; however, information obtained from a background check, such as an arrest record, cannot be used to prove guilt. Employers should also consider the impact of rejecting individuals with prior criminal convictions on otherwise qualified prospects.
Obtain workers’ compensation insurance
In most jurisdictions, companies are required to have workers’ compensation insurance in the event that an employee gets hurt on the job. This insurance will cover medical expenses and missed pay for the injured worker. To get the right quantity of coverage, you should investigate your state’s standards.
Report new employees to your state’s registry
When your company hires a new employee, you must disclose their information to your state’s registration, including their complete name and social security number. This information is subsequently sent to the National Directory of New Hires, which allows the state to track down and withhold income from people who are overdue on their child support payments.
Set up a payroll and tax withholding system
You’ll have to deduct a part of each employee’s income to cover federal and state taxes, as well as Medicare and Social Security. Third-party payroll systems can assist you in determining how much is deducted from each paycheck and how the money are allocated to taxes and employee perks.
Have all employees fill out W-4 forms
The employee fills out a W-4 form to ascertain how many allowances he or she has to determine the amount of money withheld from taxes. An employee may accept more allowances, resulting in less money being deducted from their salary for taxes.
Write and share employee notices/handbook
An employee handbook is beneficial regardless of the number of people on your payroll. It provides a central area for your employees to ask inquiries, explain benefits, and communicate employee expectations. If you have an office, you’ll almost certainly need to display employee notifications explaining their rights, including a banner about the Fair Labor Standards Act.
Comply with OSHA rules
When you hire employees, you must follow the federal Occupational Safety and Health Administration’s (OSHA) guidelines, which were set in the Occupational Safety and Health Act of 1970. OSHA has a variety of safety regulations, including the use of safe tools and equipment as well as the handling of dangerous substances.
Bottom Line
Whether you hire full-time or part-time workers is determined by your current business demands. To guarantee that your needs are being addressed, you should assess your balance between various staffing alternatives at least once a year.
SW HR Consulting has been helping companies to build their teams and values for over 10 years. Contact us to find out more about our unique hr outsourcing services and see how our expertise can benefit you.
