Employees

CraftsLaw046When you hire an employee, there are forms to fill out and rules to follow.

IRS Form W-4.   On this form, the Employee’s Withholding Allowance Certificate, the employee provides basic identifying information and tells you how much money to withhold from each paycheck. You must keep this form on hand for five years but you don’t have to file it with the IRS. Resource. You can download W-4 forms from the IRS website (www.irs.gov), or get them by contacting your local IRS office (you can find a list of offices at the IRS website) or by calling 800-TAX-FORM.

USCIS Form I-9. Complete USCIS Form I-9, Employment Eligibility Verification. This form confirms that the employee is eligible to work in the United States. The employee must complete a portion of the form and then give you documentation of his or her eligibility. The form tells you what kinds of documents are acceptable; a U.S. passport or a driver’s license and birth certificate or Social Security card are the typical showing for U.S. citizens. You don’t have to file this form, but you must keep it on hand for three years after you hire the employee or one year after the employee quits or is fired, whichever is later. Resource. You can download I-9 forms from the United States Citizenship and Immigration Services (USCIS, formerly the INS) (www.uscis.gov).

State Reporting Agency.  Employers must submit basic information on new employees to the state’s new hire reporting agency, which then uses that information to track down parents who owe child support. You will have to submit your employee’s name, address, and Social Security number; some states require additional information, such as the employee’s date of birth or first day of work. Resource. To get the information and forms you need, start at the website of the Administration for Children and Families, a subdivision of the federal Department of Health and Human Services. Review the child-support information.

Get an employer identification number (EIN) from the IRS. You’ll need to contact the IRS to obtain an EIN.

Register with your state’s labor department. Once you hire an employee, you will have to pay state unemployment taxes. These payments go to your state’s unemployment compensation fund, which provides short-term relief to workers who lose their jobs. Typically, you must complete some initial registration paperwork, then pay money into the fund periodically. Unemployment compensation is a form of insurance, so the amount you pay in will depend, in part, on how many of your former employees file for unemployment.  Resource. Start at the federal Department of Labor, which administers federal/state unemployment programs. Go to http://workforcesecurity.doleta.gov/map.asp, which provides a link to each state’s unemployment agency. Once you get to your state agency’s website, look for a tab or link on unemployment, or find the material for employers or businesses. Many states provide downloadable forms and online information on employer’s responsibilities.

Don’t forget workers’ compensation insurance. Many states require all employers to have workers’ comp coverage, either by paying into a state fund or buying a separate policy.  Some states exempt employers with no more than two or three employees from this rule, but it might make sense to purchase coverage anyway. Beyond the legal requirements, having workers’ comp coverage can save you a bundle if one of your employees is hurt on the job.

Hang up required posters. Even the smallest businesses are legally required to post certain notices to let employees know their rights under a variety of workplace laws. The federal government wants you to put up a handful of notices; many states have additional posting requirements. Resource. The Department of Labor’s website, www.dol.gov, lists workplace posters.  Search for “posters” in the A-Z index to find what you need.  Your state’s labor department probably also has the required posters on its website. If you’re having trouble figuring out which requirements apply to you or you don’t want to post a dozen different notices,  choose an all-in-one poster that combines all required state and federal notices from your local chamber of commerce for about $20.