If you’re hiring your first employee, you need to know the steps to take on that first day at work. And even if you’re hiring your 10th employee, you still want to make sure you’re up-to-date on what to do.
Most importantly, some government paperwork is required. You’ll need at least three forms: the I-9 from the Office of Homeland Security, the W-4 from the IRS, and the New Hire Reporting Form from your state government. In addition, your business will have to display mandated posters.
Form I-9, Employment Eligibility Verification.
Federal law requires employers to hire only people who may legally work in the United States: citizens and nationals, lawful permanent residents and aliens authorized to work.
Accordingly, all employers and employees must complete Form I-9. This includes employees who are U.S. citizens. If asked, you must provide your employee’s form to the U.S. Department of Labor or the Department of Homeland Security.
Your employee completes Section 1 of the form. An employee who can’t do it on his or her own can get help from a preparer (if your employee is not fully literate) or a translator (if the person is not fluent in English).
You must complete and sign Section 2, Employer Review and Verification. Within three business days of the date employment starts, you need to examine evidence of the worker’s identity and employment status. Do this by looking at documents the government has listed as acceptable proof of identity and employment eligibility. The employee is free to select from among the items on the list.
Finally, there is Section 3 of the Form I-9. Don’t worry about this section now. You’ll only use it to update or re-verify the worker’s status. This might happen, for example, when the expiration date for work authorization has been reached. Or it might happen if you rehire the employee within three years of the date when the form was originally completed.
Keep the completed form, along with any photocopies of related documents, in a file that’s separate from other employee records.
Form W-4, Employee’s Withholding Allowance Certificate.
This IRS form helps you figure out how much federal income tax to withhold from an employee’s paychecks. The employee fills out lines 1 through 7, indicating the number of dependents and whether you should withhold any additional federal income tax.
You get the filled-in part of the form – that is, the bottom of the first page. The employee gets the rest. Check your state revenue department for additional requirements. Usually the federal Form W-4 is sufficient for state withholding taxes, but some states require employees to complete a state-specific form.
New Hire Reporting Form.
The federal government has enlisted the help of employers in locating parents who owe child support. So, shortly after you hire a new employee, you must complete a New Hire Reporting Form and submit it to a designated agency in your state.
The state agency then compares the information against its child support files to locate parents. When necessary, enforcement officials can issue an income-withholding order. Your state agency also passes the information to the National Directory of New Hires, which compares it with child support information from other states. When a match is found, the information goes to enforcement officials in the other state.
You must complete and submit a New Hire Reporting Form for each new hire, whether or not he or she claims to be a parent. Each state has its own version of a New Hire Reporting Form. These forms are usually available online.
Required posters.
The federal government and most state governments require you to display certain posters in the workplace. These posters inform workers of their legal rights. To find out what federal posters your business needs and to get copies, go to the Poster Advisor operated by the U.S. Department of Labor. The Internet address is www.dol.gov/elaws/asp/posters/industry.asp. Also, check with your state labor department to learn of any posters required in your state.
Other paperwork.
The paperwork described so far is legally required. Here are some optional items to consider:
Contact information.
You may want to gather contact information from your employee, such as home address, phone numbers (land line and mobile phone), e-mail address, and name and phone number of an emergency contact.
Enrollment documents.
There may be forms or documents for the employee to complete to take part in various work-related benefits and activities, such as a health care plan or a retirement savings plan.
Policy and procedures manual.
You may want to write up information and procedures to help your new employee learn the job and perform more efficiently. But don’t go overboard with rigid work rules. Instead, emphasize the practical aspects of the job.
