Congratulations, You’re an Employer! Now What?

The good news is that your business is growing, and you’re ready to hire your first employee. But that means stepping into what is likely to be unknown territory: you’ve got to write a job description, interview candidates, find the right person, and – most importantly – manage your new employee once he or she is onboard.More importantly, you need to understand and meet the legal and regulatory requirements that come with being an employer. For a good start, here are five steps to ensure compliance with state and federal employment laws:1. Obtain an Employer Identification Number:

“The Employer Identification Number (EIN) is the equivalent of your individual social security number. This is what the IRS uses to keep track of your company and its filings. It is free to apply for and is easy to get. The IRS allows you to even apply online. An EIN is usually required to open up a business account at most banks and to otherwise conduct business.” (The New Business Blueprint: Starting a New Small Business in Nevada by The Bunker Law Group, PLLC)

2. Complete an Employee Eligibility Verification (I-9) Form for every employee you hire:

“Within three days of the start of employment, employees and employers must complete an I-9 form in which the employee attests to his or her immigration status and the employer attests that it has reviewed original identity and work authorization documents related to that employee indicating that the employee is authorized to work.” (Government Cracks Down On Employers For Paperwork Violations by Pryor Cashman LLP)

3. Obtain workers’ compensation insurance:

“Does your company have employees? If so, it is highly likely that your company is required to carry workers compensation insurance. This covers your employees for medical expenses and time off, as well as for any permanent disability that occurs as a result of an injury in the course and scope of employment.” (What Insurance Does My Business Really Need? Ten Key Areas to Consider when Purchasing Business Insurance by Jaburg Wilk)

4. Post the required notices:

“Employers are mandated … to display official posters informing employees of the law relating to their rights and responsibilities. An employer that fails to comply with these requirements may face monetary fines and other penalties. Generally, to comply with these regulations, an employer must post the most recent version of the posters in locations visible to all employees and applicants for employment. Employers should display these notices in areas accessible to all employees, such as a lunchroom, break-room, or human resources office.” (Employer Posting Requirements Under New Jersey Law by Epstein Becker & Green, P.C.)

5. File – and pay – your taxes:

“… each employee will need to fill out a Form W-4 at both the federal and state level to determine how much to withhold from each employee’s paycheck for state and federal income taxes.  In addition to just withholding amounts for federal and state taxes, employees and employers are required to withhold amounts for Social Security and Medicare taxes and remit payments in a timely manner. Your new business will then need to make sure to comply with all filing and deposit requirements of such withholdings to the IRS…” (I Just Started a New Business, How Do I Avoid Tax Trouble? by Davis, Brown, Koehn, Shors & Roberts, P.C.)


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