In these two weeks we’ll be talking about hiring employees. You’ve put a lot of time and effort into building a solid foundation for your business. Don’t let a bad hiring decision or carelessness reverse all your hard work. Hiring staff comes with a new set of legal obligations, paperwork, and expenses. Here are some guidelines to keep you on the right track.
Accurate, detailed, and updated information on each of your employees must be maintained at all times. According to the US Department of Labor (www.dol.gov), you must keep the following records on file for every employee during their employment:
- Full name, sex and social security number
- Current mailing address, ZIP code
- Birth date, if employee is younger than 19
- Workweek schedule including: time, days, hours worked each day, and total hours worked workweek
- When wages are paid (weekly, bi-monthly, etc.)
- Regular hourly pay rate
- Total daily or weekly normal time earnings for workweek
- Total overtime earnings for workweek
- All additions to/deductions from employee’s wages
- Total wages paid each pay period
- Date of payment and the pay period covered by the each payment
Additionally, you should have the following tax records and forms:
- Current W4 form: To withhold appropriate federal income taxes from a full- or part-time employee’s pay, sent yearly to your state and federal governments
- W2 form: Sent to the Social Security Administration and a share of a full- or part-time employee’s Social Security payroll taxes once a year to state and federal governments
- I-9 Employment Eligibility Verification
- Taxes on 1099 workers (independent contractors) quarterly or once a year to the federal government
- The same forms must also be submitted to the your state’s department of labor or department of taxation
- Proof of worker’s comp insurance: This policy protects a business against legal liabilities towards accidental or fatal injury to employees during normal working hours. This benefit is administered by your state.
- State and federal unemployment taxes: There are conditions of these taxes so check with your local state and federal tax office to learn more.
Always check with your local Department of Labor if you have questions.
Our last stop in hiring basics will be immigration and insurance issues.