Eight things you need to check off when hiring your first employee

If you’re small business startup is going well, sooner or later you are probably going to want to hire some help. But before you post that job and start interviewing candidates there are some important things you need to do.

According to an article published on the Small Business Administration website, there are eight federal and state requirements you need to follow when hiring your first employee. Many of them seem like nothing more than tedious paperwork but they are important none the less.

The first thing the article mentions is getting an Employer Identification Number (EIN) from the U.S. Internal Revenue Service.

The EIN is often referred to as an Employer Tax ID or as Form SS-4. The EIN is necessary for reporting taxes and other documents to the IRS. In addition, the EIN is necessary when reporting information about your employees to state agencies. Apply for EIN online or contact the IRS at 1-800-829-4933.

The next item on their list is fairly obvious – you need to withhold taxes and keep records for at least four years. Yes, you’re going to need to keep track of Federal income tax withholding, state taxes and submit annual reports to the IRS.

Every year, employers must report to the federal government wages paid and taxes withheld for each employee. This report is filed using Form W-2, wage and tax statement. Employers must complete a W-2 form for each employee who they pay a salary, wage or other compensation.

Employers must send Copy A of W-2 forms to the Social Security Administration by the last day of February to report wages and taxes of your employees for the previous calendar year. In addition, employers should send copies of W-2 forms to their employees by Jan. 31 of the year following the reporting period. Visit SSA.gov/employer for more information.

Another item that sometimes gets overlooked is verifying an employee's eligibility to work in the United States. 

Federal law requires employers to verify an employee's eligibility to work in the United States. Within three days of hire, employers must complete Form I-9, employment eligibility verification, which requires employers to examine documents to confirm the employee's citizenship or eligibility to work in the U.S. Employers can only request documentation specified on the I-9 form.

Employers do not need to submit the I-9 form with the federal government but are required to keep them on file for three years after the date of hire or one year after the date of the employee's termination, whichever is later.

Employers can use information taken from the Form I-9 to electronically verify the employment eligibility of newly hired employees by registering with E-Verify.

These are just a few of the legal requirements that you need to conform to and while they may seem somewhat onerous and needlessly time consuming you can get in serious trouble if you don’t comply.

Even though the article isn’t exactly an exciting read it’s worth taking a look just so you know what’s expected.

You can find the complete article here.

Guy Wright

Guy Wright has been covering the technology space since the days when computers had cranks and networks were steam powered. He has been a writer and editor for more years then he cares to admit.


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