What You Need to Know Before Hiring Your First Employee
Dan Levenson September 19, 2017
Hiring your first employee is a major milestone in the life of a small business owner. It’s a great feeling to move up in the world! You might have spent your first several months or years working out of a spare room in your home, or found yourself sitting in an office all by yourself with no one to bounce ideas off of or motivate you when things got difficult.
Now, it’s time to hire your first employee!
There are, however, several things you need to know before you bring that them on board.
You Need an EIN
Your EIN, or Employer Identification Number, is necessary for reporting taxes, contacting the government about your employees, and more.
Set Up Tax Withholding
Hiring an employee means that you’re going to have to juggle taxes. Make sure you know what you’re responsible for paying and what your employee is responsible for paying, then put a plan in place to deal with regular payments.
You Need More Insurance
Once you hire an employee, you need to be sure that you have worker’s compensation insurance. Even the safest desk job can have hazards, and the last thing you want is to destroy your business because your new secretary slipped and fell in the bathroom! Make sure you have worker’s compensation and general liability insurance
Register With the State
When you have employees, you’ll need to contact the state’s labor department
Report Your Employees
Your state’s new hire reporting keeps track of all employees who work for you (and anyone else). As you bring employees on board, make sure you register them with the state’s new hire reporting board. Most states and industries require this to take place within 20 days of hiring.
Check Your Notices
There are several federal guidelines listing what information must be posted in your business for your employees. This may include workers’ rights, specific safety information, and more, depending on your industry. Visit the Department of Labor website to learn more about the information you need to have posted for employees in your business.
Develop Your Policies
If you’ve never had an employee before, you may not have policies yet! While your policies will probably be a work in progress for a little while, make sure you have policies that cover everything from excessive tardiness to specific procedures for dealing with customers or specific tasks throughout the day. This practice can help ensure that employees know what’s expected of them, as well as giving you something to refer back to if you have problems with an employee.
Select Your Benefits
As a small business owner, you likely can’t afford to provide the types of employee benefits many large businesses can. You can, however, choose benefits that are more likely to attract quality employees. These include, but are not limited to:
- Health insurance (including vision and dental insurance)
- Paid time off for vacations
- Sick time
- Incentives for healthy living
- Disability insurance
- Life insurance
- Any perks that come along with the job (employee discounts, access to a facility that you own and manage, etc.)
It’s important to have a good idea of the benefits you can offer potential employees before you begin the hiring process. While they may be adapted over time as your business grows, your first set of employees will want to know what you can offer them before they agree to work for you.