Taking on your first employee is an incredibly exciting time for a business. Whether business growth has necessitated additional people joining you on your journey or you’re a new business sourcing the perfect people to help you get up and running, it can be a monumental time for your business.
But it’s not a decision to be taken lightly. Employing people can be the best or worst thing you can do for your company, and the outcome will all depend on how well you are prepared to bring people on board.
Let’s examine a few things you need to do before taking your first hire or placing an ad for people to join you.
Get an EIN
If you don’t already have one, you need to apply for an EIN, which is your employee identification number and allows you to submit taxes for your company. This unique identifier is crucial for tax reporting and other business activities. Not all businesses need one, but it’s advised that you get one regardless of whether or not you have employees. And if you don’t, you cannot hire until you have one. To get an EIN, you need to fill out IRS Form SS-4, and the process of your application can take four weeks, longer if information is omitted or incorrect.
Determine Your Job Role
For each job role you are creating, such as a sales representative or a customer service agent, you need to have defined roles and responsibilities for people to carry out. They need to be realistic as to what you can reasonably expect people to do in the time frame allotted to their schedule, and you should take on as many people as required to accommodate the workload. People won’t apply for jobs, nor will you find the right people if you’re unclear about what they can and will be expected to do. Understand your needs and the job role itself, and you’ll have better luck securing the right employees.
Workers Compensation Insurance
Workers’ compensation insurance, or workers’ comp, is a legally mandated insurance that all employers need, with the only exception being Texas. This insurance provides financial protection to both the employer and the employee in case of a work-related injury or illness. Without worker’s compensation insurance, you could be liable for significant medical and legal costs in the event of a workplace injury. You can obtain this insurance via your local state’s insurance program, on a self-insured basis, or via a commercial carrier.
Set Up Payroll
However you’re paying your employees, you need an efficient payroll that can handle all of the company’s payment requests and requirements. Typically, companies, especially smaller ones, will use a payroll service provider instead of setting up a completely new department internally to handle this. Payroll will cover everything from tracking employee hours to calculating tax withholdings, unemployment taxes, and sending checks, for example. It can be a time-consuming process, so it’s important to have an efficient payroll system in place.
Employee Rights
All employers are legally mandated to display posters in the office or workplace to inform employees of their rights and responsibilities as detailed under federal law. The US Department of Labor can advise you on which posters you need, so you need to know your specific requirements for displaying the right ones.
Pay and Frequency
You need to determine how you will pay your employees, how frequently, and how much. There are legal guidelines pertaining to the amount you need to pay workers, and the remuneration needs to be appropriate to the skills and qualifications required for the job role. You can choose to pay weekly or monthly on a set date every month; it’s entirely up to you. You can pay by check or cash as long as you can stick to this and pay on time.
Onboarding
Onboarding employees give each employee the knowledge, skills, and tools they need to successfully join the company. It can involve all the legal aspects of hiring people, i.e., checking identification, getting them enrolled on payroll, etc, amongst other things.
Onboarding should include training, guidance on company rules, regulations, standards, etc, and equip them to settle in easier and faster with everything taken care of in one place.
Whatever you think they will need, your onboarding needs to include it, and it can start prior to their starting date to help get them up to speed or on the first day to ease them in gently, but having some idea of the training they will need, the paperwork and legal requirements you need to obtain, i.e., the right to work legally in the US and any other important information about the company such as who to contact for help, the HR department, points of contact, policies, payroll, etc. will help people get started in the right way.
