The goal of most businesses is to grow. However, in order to grow, or to be able to step away from the business for vacation, you’ll need help with day-to-day operations. If you’ve never hired someone before – or it’s been a long time – don’t worry – here’s the information you need to get started.
Hiring a new employee means complying with federal and state regulations. Although the list of regulations and laws may seem long, it is not a daunting process when you have legal assistance.
The U.S. Small Business Association (SBA) can help or you can contact our office for assistance with any business legal issues. We commonly walk businesses like yours through the hiring process.
Obtain an Employer Identification Number (EIN)
Often referred to as an Employer Tax ID or Form SS-4, this nine digit number is issued by the U.S. Internal Revenue Service (IRS) and used when paying taxes or reporting information to state agencies.
The IRS requires employers to keep the following employment tax records for at least four years:
- Federal income tax withholding,
- Federal wage and tax statements
- State wage and tax statements.
- Additional records may be required.
See IRS Employer Tax Guide and the IRS North Carolina State Guide for specifics.
Verify Employee Eligibility
All employers must verify an employee’s eligibility to work in the United States. This is done via the I-9 form that can be obtained and filed online. Verification must be completed within three days of employment and kept on file for three years.
Register with New Hire Reporting Program
All employers must report new and re-hired employees to their state’s New Report Hiring System. In North Carolina, you can go to the NC New Hire Directory.
Workers’ Compensation Insurance
All employers must carry workers’ compensation insurance when they have employees. The insurance can be obtained through a commercial carrier, through their state’s workers’ compensation program, or on a self-insured basis where the employer assumes the financial risk for providing benefits to employees.
Post Required Notices
Employers must display posters in their workplace that inform employees of their employer’s responsibilities and employees’ rights. For example, you must use posters identifying:
- Federal and state minimum wage (Fair Labor Standards Act, FLSA)
- Equal employment opportunity (EEO)
- Safety (Occupational Safety & Health Administration, OSHA)
File Your Taxes
Employers who pay wages are generally subject to taxes and income tax withholding, Social Security, and Medicare taxes. The specific forms needed depend upon the facts and circumstances of your situation.
Be sure to discuss your situation with our experienced business law attorneys to make sure you’re in federal and state compliance. Failing to do so could result in unnecessary fines, fees, and litigation. Let us walk you through the process so that you don’t have any problems down the road.