When you hire a new employee, there are required forms you or your new hire must complete. Some forms need to be filed with a local or federal agency, some just need to be kept safe and secure so that different agencies can access them if needed. This article is for educational purposes only. Please consult an HR professional or legal counsel with respect compliance obligations for hiring employees.
1. Register as an employer with the IRS
If bringing on employees, you need to register for an employer identification number (EIN). An EIN is a nine-digit number assigned by the IRS used to identify the tax accounts of employers (and certain others who have no employees). The IRS uses the number to identify taxpayers who are required to file various business tax returns. Apply for an EIN on the IRS website here.
2. Join the IRS payment system.
The Electronic Federal Tax Payment System tax payment service is provided free by the U.S. Department of the Treasury. After you've enrolled and received credentials, you can pay any tax due to the Internal Revenue Service (IRS) using this system. When you withhold taxes from employee paychecks, you’ll turn them over the IRS using this system. Register here.
When a new employee starts, they need to fill out Form W-4 (Employee’s Withholding Certificate), which allows them to decide how much federal income tax to withhold from their pay. You’re responsible for submitting that form to the IRS. For more details on Form W-4, the IRS breaks down key information you need to know. This form needs to be filled out by a new employee before the first paycheck. Employees can change withholdings on their W-4 form as often as they’d like. It’s the employer’s responsibility to keep track of the changes and make sure employee paychecks reflect the most recent changes.
Before or on the first day, new hires should fill out section one of Form I-9, which includes information like their Social Security number, their contact information, and their employment eligibility. By their third day of work, they should have shown you valid personal documents, including their identification and employment authorization. This can be a combination of various documents, such as a U.S. passport, a driver’s license, and a Social Security card. For the complete list of acceptable documents for Form I-9, head to the U.S. Citizenship and Immigration Services website. The federal government doesn’t require employers to submit Form I-9, but you do need to retain the file in your system for three years after the hire date, or for a year after the employee leaves the company, whichever comes later.
5. Verify employment eligibility (E-Verify)
E-Verify is a web-based system that allows enrolled employers to confirm the eligibility of their employees to work in the United States. E-Verify employers verify the identity and employment eligibility of newly hired employees by electronically matching information provided by employees on the Form I-9 against records available to the Social Security Administration (SSA) and the Department of Homeland Security (DHS).
Note: E-Verify is a voluntary program but depending on your location and business, you might be required to enroll in the E-Verify program in addition to completing Form I-9. More details can be found on the E-Verify website.
6. Register with your state’s labor department
Paying state unemployment compensation taxes is required once you bring on an employee. Go to the Department of Labor's website for a list of state unemployment insurance tax agencies.
7. Provide an employee handbook
In addition to files and forms, all business should have an employee handbook. This document gives your employees an idea of expectations, requirements, and best practices. If any issues arise, they can always refer back to the handbook to see how to deal with them. To name just a few, your handbook should include your organization’s mission, values, and goals, its code of conduct, anti-discrimination policy, non-disclosure agreement, safety and security policies, compensation and benefits, work schedules (including how to track time, take vacation, and notify of leave), and general information besides legal requirements.
Make sure that each employee has a copy, reads, it, and signs a statement acknowledging that they have. Then, keep those statements in your employee files and make a copy easily accessible to the whole team, whether that be in print or digitally.
8. Run a background check
Running a background check helps protect your business, other employees, and your clients. You’ll discover if the candidate has anything in their background to disqualify them and could help identify if they’ve provided misleading or false information. Check out the Best Background Check Service for Small Business 2019.
9. Display federal workplace posters
Every business that has employees must have the following federal workplace posters displayed in a location where employees congregate like a lunchroom.
- A Family and Medical Leave Act poster (for employers with 50 or more employees)
- An OSHA (Occupational Safety and Health Act) poster, for all employers (some states have their own plans and posters)
- A Fair Labor Standards Act poster from the U.S. Department of Labor, for all employers
- A Notices to Workers with Disabilities Act/Special Minimum Wage poster from the Department of Labor, for employers who have workers with disabilities.
- An Employee Polygraph Protection Act poster from the Department of Labor.
You can order these publications from the U.S. Department of Labor.