Starting a new business and hiring your first employee can be a daunting! Geisler Law can help guide you through the steps of business formation and becoming an employer. Here are some of the major steps you should be aware of before you hire your first employee:
additional resources 1. Obtain an Employment Identification number. This is identifies your business entity and is necessary for filing taxes, reporting employee information to state agencies, and other IRS related activities. You can apply online here.
http://opensweat.com/?p=1569 2. Employee Eligibility Verification. Employers must complete a Form I-9 to ensure that an employee is eligible to work in the United States under federal law. You are not required to submit the I-9, but must keep it on file for three years after hiring.
3. Workers Compensation Insurance. Minnesota requires that all employers carry workers’ compensation coverage to insure employees who may experience on the job injuries. There are some exceptions, but even employers with only one employee generally are required to provide coverage.
4. New Hire Reporting. Federal and state law require that employers report their newly hired employees to the Minnesota New Hire Reporting Center Minnesota New Hire Reporting Center.
5. Post Mandated Notices. Both state governments and the federal government require certain poster notices of labor and employment law information, like minimum wage, hour laws, workers compensation, harassment, and more. Research what your state requires and what employment laws apply to your type of business.
6. Determine your federal tax responsibilities. For the most part, if you page wages that are subject to income tax withholding, social security, or Medicare then you must file taxes with the IRS. Also, ensure that your employees will out a W-4 so you can withhold the proper amount from their paychecks.
7. Prepare your record keeping system. You should keep track of a number of things regarding your employees, including: Identifying information and address, weekly work hours, payment schedule and rate, total earnings (including overtime), any additions or deductions taken from the employee’s wages, and date of payment and pay periods.
8. Determine what benefits you will offer. Determine whether you will offer Health Insurance, IRAs, 401(k) plans, and other related benefits and set up or apply for these plans. Develop your vacation and sick leave policies as well.
There is a lot to think about when taking the big step of hiring employees! Contact Geisler Law and mention this blog post for a free legal review to discuss the business formation and hiring process.