Four Things Business Owners Should Do Before Hiring Their First Employee

Has your business grown to the point where you need extra help to keep things running smoothly? If you are ready to hire your first employee or need to convert an independent contractor to employee status, there are several steps you will need to take to comply with state and federal law and to shield your business from future disputes. Here are four things you should begin working on before you extend that first job offer. 

1. Organize a secure space to put the documents related to hiring and paying your employee. There is a LOT of paperwork involved with employing workers, and much of it includes sensitive information like Social Security numbers and other forms of confidential identification information. It is your responsibility to collect and protect this data. In addition to the W-2, W-4, and I-9 forms that your employee must complete, you must maintain meticulous payroll records, including withholding documents related to FICA taxes. The costs of not keeping adequate records could be astronomical should a former employee decide to sue you, so it is well worth taking the time to make sure you have everything in good order. 

2. Write an employee handbook. To be clear, you are not required by law to compose a handbook for your employees, and it might seem like a waste of time if you don’t foresee hiring a significant number of people. It is always a good idea, however, to write one that lays out the company’s policies and procedures, including what is expected of your workers and protocols for disciplinary action and terminations. Be aware that, if you do decide to create an employee handbook, there are certain sections that are required to be included by law. 

3. Get workers’ compensation insurance and revisit your insurance needs as a business. Regardless of how many workers your business employs, you are required to carry workers’ compensation insurance in the event that your employee is injured on the job. It might also be a good idea to see if there are any supplemental insurance policies that make sense for your company to carry now that you are not the only employee. 

4. Determine whether your employee will be salaried or hourly. There is a lot that goes into determining whether certain employees should be compensated by the hour or on a salaried basis. Generally, white-collar workers who must exhibit a fair amount of independence and flexibility while on the job can be salaried, while those whose tasks and hours are dictated by someone else are designated as hourly. There are plenty of exceptions, however, which is one reason you should speak with an attorney who is experienced in handling employment law matters.  

Conclusion

Expanding your business with the help of an employee or two is an exciting thing to be able to do. Establishing and maintaining the terms of your employee relationships on a solid legal footing will help make that process much easier in the beginning and will help prevent potential headaches down the road. Integrated General Counsel is well-equipped to provide efficient legal counsel regarding employment law matters or any other legal issues having to do with your business. Give us a call at 925-399-1529 to learn how we can help you.