Congratulations, your small business is bustling enough to hire your first employee. With that success comes some new responsibility — and some new paperwork.
According to the U.S. Small Business Administration, when you hire your first employee you must:
- Obtain an Employee Identification Number.
- Set up withholding taxes.
- Verify your employee's eligibility.
- Register with your state.
- Obtain workers' compensation insurance.
- Register for unemployment tax registration.
- Obtain disability insurance.
- Post required notices.
- File your taxes.
- Get organized and keep yourself informed.
For details on how the above steps apply to your own business, see the SBA website
It also helps when making this important transition to have an online payroll service on board to help you meet your obligations. It can be a game changer for a small business owner who is trying to grow his enterprise without spending countless hours on new and confusing paperwork.
Using a service like SurePayroll will ensure that all wage deductions and withholdings are performed automatically for your new employee with just a few simple data entries. Federal, state and local payroll taxes are calculated, filed and paid on your behalf and accuracy is guaranteed.
A wide array of add-on services
are also available, such as health insurance, 401(k) and workers' compensation.
Once the initial, legal requirements are met for your first employee, other steps can be undertaken soon afterwards. For example, many companies create an employee handbook, which, while not required by law, gives current and future employees clear guidance on the company's mission, procedures and expectations.
Another step, required by law in many cases, is to adopt workplace safety measures and procedures under the requirements of the Occupational Safety and Health Act (OHSA). For further information on these rules, consult the OHSA website
A final major step is to properly set up personnel files on each employee. The file should contain documents such as job applications, employment offers, IRS forms, performance evaluations and I-9 forms, which document an employee's immigration status. Medical records should be kept in a separate secure place to protect the employees' privacy.
All in all, the initial hiring process can be a daunting undertaking for a small business owner used to operating as a sole employee. With a little bit of advance research — and the help of an online payroll service — the growth can be absorbed smoothly.