When hiring new personnel, follow these procedures to ensure compliance with federal and state standards.
What you’ll discover:
1. Get an Employer Identification Number (EIN).
2. Create Tax Documentation
3. Fill out the Employment Eligibility Form
4. Inform Us of Your New Hires
5. Get Workers’ Compensation Insurance.
A team of A-list personnel can help you achieve your company objectives quicker and more effectively than you could on your alone. But, it is not as easy as a handshake and informing a new employee when to arrive for work. You must ensure that your company is both state and federally compliant. When hiring new personnel, follow these measures to ensure compliance.
Table of Contents
1. Get an Employer Identification Number (EIN).
Before you recruit staff, you must get an employer identification number, sometimes known as an EIN. Fill out Form SS-4 to get it from the IRS. This may be done online or by calling the IRS at 1-800-829-4933. Consider an EIN to be your company’s social security number. It will be required to submit taxes and for many other company operations, such as withholdings and payroll taxes for workers. Read more about obtaining an EIN.
2. Create Tax Documentation
The IRS mandates that you keep all employment and tax records for at least four years. These documents are an important part of your paper trail. Prepare to withhold federal, state, and local taxes and complete out the required papers for each. All of your workers must produce Form W-4, and you must preserve copies and submit them to the IRS as needed. You must also submit the W-2 forms and tax statements for each level with the Social Security Administration, which you may do online. The W-2 forms must be submitted by January 31.
3. Fill out the Employment Eligibility Form
You must check your employee’s eligibility to work under federal law. You must use form I-9 or the E-Verify system online with the US Citizenship and Immigration Services within three days of employing your employee. To do this activity, you must check that the papers submitted by the employee demonstrate that person’s citizenship or capacity to work lawfully in the United States. Remember that you can only get this information from your employee if you complete the I-9 form. Otherwise, the employee is not required to comply.
4. Inform Us of Your New Hires
All firms must record new employees. Your state will have its own reporting method, which you can find by searching for your state’s name and the keyword “New Hire Reporting System” online. Make sure you do this within 20 days of employing a new employee—and not 20 business days. This is a frequent mistake, and the government may punish you if you are late.
5. Get Workers’ Compensation Insurance.
All firms, according to the Small Business Administration, must get workers’ compensation insurance when they begin recruiting employees. But, this only applies to employees, not independent contractors, therefore it’s critical to grasp the distinction. After you’ve decided on the sort of worker you want to hire, put it in writing using an Employment Contract or an Independent Contractor Agreement to ensure your relationship is clear.
If you hire employees, you may get workers’ compensation insurance through a commercial insurer, the state Worker Compensation Insurance program, or a fund you set up on your own, as long as you fulfill your state’s standards.
