There are several considerations for when you’re expanding your business and plan to hire your first employee. For instance, you’ll need to ensure that your workplace is safe and that your employees are well-informed of their rights. The following are the most important duties you have as an employer.
Tips for Business Owners About Workplace Safety and Beyond
1. Get an Employer Identification Number and Tax ID Number
Before you hire any employees, you need to get an employer identification number (EIN) which will be placed on your tax returns and other documents you give to the Internal Revenue Service (IRS). This acts as a Social Security number for your company since it identifies you to the IRS. To secure this, you have to file Form SS-4.
Not all businesses need to get a tax ID number. Some states will assign the local or state tax ID number to you automatically. There are states that require business owners to apply for the ID number. Reach out to your state’s tax authority to find out if you’ll need to do this before you hire your first employee. Most likely, it will be required if you’re in a state or locality that collects income tax.
2. Register with the Labor Department
Once you have employees, you’ll need to pay state unemployment compensation taxes. This offers short-term assistance to employees who lose their jobs. Payments go to the state unemployment compensation fund so that these workers have temporary wage replacement.
3. Set Up a System for Tax Withholding
Every employee will have a portion of their income withheld and deposited with the IRS. You’ll need to make Medicare and Social Security tax payments to the IRS. There’s a chance you might have to withhold for state taxes. Check with your state’s tax agency before you tell prospective employees anything about it.
Going along with this is the fact that each employee must fill out IRS Form W-4. This is otherwise called the Withholding Allowance Certificate. Employees use this to tell you what allowances they’re claiming and you know how much tax to withhold from their paychecks. You don’t need to file this with the IRS.
4. Complete Form I-9 for Every Employee
The U.S. Citizenship and Immigration Services mandates that employers verify their employees are eligible to work in the United States with this form. You should have it in your files for three years, but you don’t have to submit it to the agency. Be sure to keep the form separate from the employee’s personnel file.
5. Make Workplace Safety a Priority
It’s crucial that you keep workplace safety in mind at all times. Do anything necessary to maintain a work environment that is free from hazards and safe in other ways. Part of this is having workers’ compensation insurance that protects workers in the event that they’re injured while on the premises or elsewhere conducting work duties. This is required in a majority of states. However, some states have an exception for very small businesses.
6. Safety Measures
All employers need to comply with the requirements set forth by the Occupational Safety and Health Act (OSHA). Keep your workplace free of hazards. It’s helpful to do a walk-through to determine problem areas before you hire your first employee and have employees come into your workspace. You’ll also need to report serious workplace accidents to the proper government administrators and hold on to detailed safety records.
Another way to put an emphasis on workplace safety is to have regular workshops or individualized training for employees when you want them to use new machinery, tools, or equipment. You might come up with an organized plan on how to do this or develop it over time with expert advice on how and when to conduct this training.
7. Set up Personnel Files and Benefits
Every employee should have a file in which you keep their job-related documents. This includes applications, employment offers, their Form W-4, employee benefits forms, and performance reviews, among other things. Store medical records and I-9 forms separately in a confidential spot.
Employee benefits programs like 401(k) and health insurance are important to employees. If you maintain any such programs, be sure to have a sign-up procedure to allow them to name dependents and choose which options they’d like.
8. Draft an Employee Handbook
Though not every company needs to have or wants an employee handbook, it might be to your advantage – even as you hire your first employee. It’s good for describing policies, expectations, and rules. You can use the handbook as a legal means of telling your employees that their employment is at-will unless they’ve signed an official contract.
9. Post Worker Rights Notices
Some government agencies have employers put up notices that tell their employees about their worker rights. This offers information, resources, and contact numbers/websites if they have questions or concerns. Use the Department of Labor website to find out which federal posters are required. Your state department of labor also may have mandatory posters. You can learn more about this by going to your state in the state list on the Department of Labor’s website.
Take a Huge Amount of Stress Off Running Your Business
Running a business can be overwhelming in the best of circumstances. Organization and proactive work to ensure you have all the above in place before you hire your first employee can save you a great deal of headache.