Up until now, you alone have been running your small business. Now you need help. The moment when a small business owner decides to hire his or her first employee is one of triumph. Conversely, knowing how to start the hiring process can be a moment of confusion.
If you’re ready to hire your first employee, first of all, congratulations! Second, don’t worry. Follow these steps to ensure your hiring process goes smoothly and you adhere to state and federal regulations.
- Apply for your Employee Identification Number (EIN) if you don’t already have one. You will need this for taxes purposes and to get the hiring process started.
- Prepare forms and establish a recordkeeping system for employee tax withholdings. You need to maintain records on your employee’s federal income tax withholdings, your federal wage and tax statements, and your state taxes for four years. Get organized now, and don’t wait until tax season!
- Have your employee fill out an I-9 statement, and verify his or her eligibility to work in the U.S.
- Register with your state’s New Hire Reporting Program. You must report your new hire within 20 days.
- Post required notices at your work site, such as state and federal labor laws.
- File your quarterly tax return (form 941). This is required if you withhold any taxes from your employee’s earnings.
- And, perhaps most importantly, get organized! Hiring an employee means mandatory reporting, more complex tax filings, numerous legal requirements, good recordkeeping and looking out for your employee’s well being. Now is the time to consider employee benefits, maintaining a safe workplace and keeping your employee informed on your company’s practices and their rights and responsibilities. You will also need an excellent record keeping system to keep track of important information about your employee, stay abreast on labor laws and make sure you comply with state and federal regulations.
Hiring your first employee is a big step. When you are ready, start by sitting down with us as your Creative Business Lawyer®. We can give you legal guidance before, during and after the hiring process.
Developing a trusting relationship with a Creative Business Lawyer® can ensure your business complies with state and federal regulations and is positioned for success.
This article is a service of A. J. Yolofsky, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.