How to Legally Recruit a New Employee
Congratulations! Why? If you’re looking to hire your first employee, you’re well on the road to making your startup a success.
However, chances are your heart rate has just got a little faster too. Suddenly the responsibility seems overwhelming. You’re heading in to employment law territory, and that’s scary, right?
Well, it needn’t be. Like many other businesses processes you’ve been tackling head on in the early days of a new business, you just need to get educated. Know what you’re doing and you’ll not only feel confident, but you’ll find the employee that really pushes your business success forwards.
The Legal Requirements
We’re not going to lie. There are a bunch of legal hurdles you need to scale. However, many of these are a one hit wonder: do them once and then you can sit back and recruit as you need to.
Here’s a quick run-down of the legal check list you need to go through:
Employer Identification Number (EIN): To hire employees you need this unique number using a simple form from the IRS.
Register with your labor department: Having employees opens you up to paying unemployment compensation taxes. You need to register as soon as you have your first employee.
Organize workers’ compensation insurance: Under Californian law you must have compensation insurance to protect your staff if they are injured at work. Small employers are not exempt.
Organize your payroll and make sure it withholds taxes: As an employer, you will need to hold back a percentage of your employee’s income for tax. You’ll find some useful information from the IRS here. Each employee will need to complete form W-4 so that you know how much of their paycheck you need to hold back. You’ll also need to get clued up on state taxes. Californian employers can find out more here.
Check you’re allowed to hire someone: It’s your responsibility to complete form I-9 and check your prospective employee’s eligibility to work in the U.S.
Report the new employee to the ACF: You’ll need to go here to find out more, and report each new employee to the state’s new hire reporting agency. The purpose is to ensure child support payments but you must do it for each and every new employee.
Sort out your posters: Now you’re an employer, you’ll need to make sure that your federal posters, as required by the Department of Labor, are clearly visible. These cover wages, working conditions and more. LastminuteHR can help you here.
Annually file form 940 to the IRS: This form is completed once a year.
Review your workplace health and safety: You’ll need to comply with the Occupational Safety and Health Act (OSHA) which is all about making sure employees are able to do their jobs safely. Find out more here.
Those are the legal ‘must-do’s’. However, it’s in your interests to use this first hire stage to get all your employer ducks in a row.
We also suggest that you:
Construct an employee handbook
Organize a personnel or HR system to keep track of everything
Organize employee benefit programs
Understand recruitment techniques such as interview skills
That’s where LastminuteHR is in your corner. Get in touch to help you out hiring your first employee.