If you have been running your own business for some time and have finally reached a point where you are in a position to hire your first employee, it is essential that you are compliant from day one with all the legal rules and regulations that now apply to you. From insurance requirements to government registrations and tax forms, becoming an employer brings a whole new range of obligations to you as a business owner. Here are some of the main things to do before you take your first employee on.
Work With an HR Professional
One of the best things that you can do before you hire your first employee is to use an HR consulting Nashville expert, such as G&A Partners. With more HR companies now available for small business owners to outsource to, it’s easier for you to get off to the right start when getting your first team together. An HR company or consultant can provide advice regarding making sure that your company is fully compliant with all the laws and regulations in place, along with helping you make the best decisions in terms of where and how to advertise your job vacancies. A good HR professional will be able to take the time to go through any applications that you get, choose the right new hires, and make sure that they get off to the best start.
Get an Employer Identification Number
When your business starts hiring employees, it’s important to get an employer identification number (ein number). The EIN will be used on any tax returns and other important documents to be submitted to the IRS in the future. You need to file IRS Form SS-4 to get an EIN for your company. You can do this from the IRS website.
Set Up a Payroll System
Another reason to work with an HR consultant is that many HR professionals will also be able to help with aspects such as payroll. You will need to set up a payroll system that is designed to withhold taxes from the income of each employee before depositing it with the IRS. You’ll also need to make sure that employees are making Medicare and Social Security payments, which are typically taken straight from gross wages. You can get more information on these financial obligations from the IRS website. You may also need to withhold taxes for your state. Get more information from the tax agency from your state.
Register for Unemployment Tax
You will need to pay state unemployment compensation taxes once your company begins to hire employees. The payments go to the unemployment compensation fund for your state to provide short-term relief to workers who lose their job. You will need to register as an employer with your state’s labor department.
Get Worker’s Compensation
Once you start hiring employees, you will need worker’s compensation insurance coverage to protect any workers who might suffer injuries on the job. Worker’s compensation insurance is typically required in most states, although some do make an exception for small employers who do not have a very large team. Your state’s labor department or an HR consultant will be able to offer specific advice for your business to follow.
Report New Employees
You will need to report each new employee that you take on to the new hire reporting agency for your state. New hire reporting programs require employers to report information on all new employees. This is mainly for the purpose of locating employees who are parents, in case they owe child support payments. The new hire reporting agency is different for each state. You can check out the page for State New Hire Reporting on the Administration for Children & Families website to get the specific details for your state’s new hire reporting agency.
Adopt Workplace Health and Safety Measures
Every employer needs to ensure that the workplace is a safe and healthy place for their employees to be. As an employer, you will need to make sure that your workplace is compliant with all the relevant requirements of the Occupational Safety and Health Act (OSHA). You will need to make sure that your workplace is free from hazards, that employees have the training that they need to do their jobs safely, and that any serious workplace accidents are reported to the appropriate agencies. You can find more detailed information on these rules and regulations at the OSHA website. If you’re based in California, you can provide your employees with the California OSHA training program, to make sure your employees follow the safety regulations of the state of California.
Post Required Notices
Several government agencies will require employers to post notices that provide information on worker rights for their employees in the workplace. You can get the required federal posters to display to make sure that employees are informed about their rights from the Department of Labor website. The ‘poster advisor’ on the Department of Labor website is a useful tool to use to determine which posters you will be required to display in your workplace.
Create an Employee Handbook
Although creating an employee handbook is not a legal requirement for companies when hiring employees, it’s something that is always worth doing as a handbook makes it easy for employees to understand what is expected of them in their new role. A handbook can be used to describe the employee policies for your business and make the responsibilities of both you and your employees clear.
Set Up Employee Benefits
Employee benefits can help you attract good employees and encourage them to work for you for longer. You can use a HR company or consultant to help you set up benefits for your employees since these professionals will often be able to get access to a wider range of sought-after benefits such as health insurance and retirement plans for your employees. Once you set up benefits for your employees, you will need to put sign-up procedures in place so that employees can select options, enroll, and name dependents.
Hiring employees is a huge step for any business. Before you take on the first members of your team, it’s important to make sure that your company is ready.