It’s time to hire your first employee. So, how do you do that?
There are multiple steps involved, all with different state law, federal law, and regulatory compliance requirements. You can spend hours (even days) researching and trying to figure it all out yourself. It won’t take long to realize there’s a reason companies have staff and entire departments devoted to handling employment and HR (human resources).
As a new startup or small business owner, you may not have the resources to pay a full time office manager. Here are 6 QUICK TIPS for hiring your first employee. Use these steps to create a repeatable process, and you will also be all set for employee #2!
1. Put Internal Employment Documents into Place Before Hiring Your First Employee
2. Select Payroll Service or Software
There are many services, like Paychex (https://www.paychex.com) and other services, that will handle payroll and other administrative services. There are also computer programs, like Quickbooks (https://quickbooks.intuit.com) and other programs, that allow you to do payroll yourself. Many CPA firms and bookkeepers also offer payroll and back office services. A little research should reveal which option is the best fit for your business needs.
3. Open a Texas Workforce Commission Account
Employers must report new hires, pay state employment taxes, and report employment terminations to the Texas Workforce Commission. To do this, an account must be set up. An account can be set up fairly easily online: https://www.twc.state.tx.us/businesses/unemployment-tax-registration. The website also offers valuable information and resources for employers.
4. Elect or Opt Out of Texas Workers’ Compensation
Workers’ compensation coverage provides wage and medical benefits to employees if they are injured on the job. Except in cases of gross negligence resulting in a fatality, it also limits your company’s liability if an employee files a lawsuit for damages. Employers in Texas are not required to carry workers’ compensation coverage. If your company elects not to carry coverage, it is considered a “non-subscriber” and must notify employees that your company does not provide coverage. Information about the notices that must be posted in the workplace, given directly to employees, and filed annually with the Texas Department of Insurance can be found here: https://www.tdi.texas.gov/wc/employer/employerresources.html.
5. Verify Employment Eligibility (Form I-9)
Employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States, including citizens and noncitizens. The employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and to relate to the employee and record the document information on the Form I-9. Employers must retain Form I-9 for a designated period and make it available for inspection by authorized government officers. Completed I-9 forms should be kept together in a file separate from the employee’s personnel file. These forms must be updated/renewed when the identity document provided by the employee expires. Dates for renewal of Form I-9 should be calendared.
Form I-9 can be retrieved from the Department of Homeland Security: https://www.uscis.gov/i-9
6. Wrap it Up
There are a few final bits of paperwork and reporting that wrap up the hiring process:
- Report the new hire to the Texas Workforce Commission;
- Enter payroll information (including W-4 form) into your payroll program or transmit to your payroll service;
- Provide required notices (including workers comp coverage) to the new hire;
- Secure the new hire’s signature to appropriate company agreements and acknowledgements; and
- File documents in employee’s personnel file and separate I-9 file and calendar I-9 renewal date.
If you have questions about any of these steps or if you would like help getting it all done, schedule your free telephone consultation today. We are happy to help.