While many small businesses fail, others seem to flourish almost from day one. You find yourself overwhelmed with work and faced with the difficult task of expanding from a one man operation to a CEO and supervisor of others. Here is a list of things you must do before taking the crucial first step of hiring your first employee or if you are hiring employees for your startup.
Deal with tax issues. Although this can be scary to a first-time employer, there are really only two basic things you are required to so. First, apply for an employer identification number. You can do this by submitting IRS form SS-4, available at the Internal Revenue Service websites. This number will be used on tax forms and any other documents that the IRS requires of employers. Second, file form 940-EZ when you file your own taxes every year. This form basically allows you to report the federal and state unemployment tax that you paid throughout the year on behalf of your employee. Both forms are available at www.irs.gov.
Register with your state’s unemployment compensation agency and labor department. In most states, when you hire an employee you are responsible for paying state unemployment insurance. This serves as a safety net for anyone who loses their job by providing money for living and job-hunting expenses.
Buy a worker’s compensation policy. This is not just wise, but also legally required because it will help support any employees who are injured in your workplace. Worker’s compensation insurance is necessary for any employee, even in generally safe jobs such as office or counter work.
Implement a tax withholding system. Like all employers, you will need to withhold federal and state taxes as well as taxes for Social Security and Medicare. You can obtain information on how to do this from www.irs.gov (look for Employer’s Tax Guide, which is publication 15, circular E). Your state’s tax website can give you information about what is required of you by your state tax agency.
Create a safe workplace. Not only is this fair to your future employee or employees, it will protect you from law suits and labor board violations. You must comply with OSHA (Occupational Safety and Health Act) regulations as well as any state labor safety requirements. This requirements generally include teaching employees safer ways to perform their job duties, keeping safety and incident records, and providing a safe workplace. The details can be found at www.osha.gov. Another way to design a safe workplace is to post all legally mandated notices and posters regarding worker rights. This will keep your employees safe from exploitation and protect you from legal action.
Hiring that first employee is an important step in your business’s growth. Although these five steps can seem difficult and even oppressive, there are good reasons for them. Making sure to follow all legal mandates will ensure that both you and your employees enjoy all of the rights that you are entitled to, and that your business can continue to grow in a healthy and safe manner. You also need to be aware of how employee recognition affects your company. After reading this you might also want to find out how to fire employees and save your business.
