How to Hire Employees

To learn how to hire employees, you’ll want to first understand the necessary paperwork and legal obligations you have when bringing on new employees. In addition to paperwork and legal obligations, you’ll also have additional liabilities and expenses.

Generally, the human resources department is responsible for posting job descriptions, screening for potential applicants, conducting telephone interviews, and forwarding those qualified candidates onto hiring managers who then determine whether or not certain candidates qualify for a face-to-face interview. However, if you don’t have an HR department to assist you with this lengthy process, you can either outsource to a third party company or do the legwork yourself.

Steps to Take When Looking for Employees

There are many steps that you as a business owner should take when hiring employees. If you want to know how to do so, you’ll want to follow those steps to ensure you hire the right employee(s) while also complying with all federal, state, and local regulations.

Step 1. Obtain an EIN

If you haven’t yet obtained an Employer Identification Number (EIN), then you’ll need to do this before beginning the interview process. You’ll need this number to remain compliant with local, state, and federal laws. Without this number, you cannot hire any employees. Obtaining an EIN is simple. Visit the IRS website and apply online; however, you can also fax or mail your application.

Step 2. Conduct Due Diligence

Before jumping right into it, you’ll want to do your research. You currently run your business alone. What type of business do you operate? What types of products or services do you sell or offer to prospective customers? What type of help do you need the most? For example, if you need assistance running the company, you’ll want to look for a high-level executive who can assist you in running and growing your business.

If you operate in the tech industry, you may need a software engineer or developer. If you operate in the legal industry, you may need another attorney, paralegal, or legal assistant. If the help you need is more administrative in nature, then you’ll want to look for either an administrative assistant or executive assistant who can do the simpler tasks, such as responding to emails, answering the phones, and preparing meetings.

Step 3. Job Description Posting

Once you know what type and level of help you need, you can draft a job description and publish the job posting on several websites, including your own company’s website, LinkedIn, Facebook, and other appropriate career websites. Be mindful that a lot of people stretch the truth on job applications and resumes to appear more attractive on paper. So when reviewing resumes, you’ll want to think of questions that will help verify the candidate’s qualifications. You may even want to indicate in the job description that the position requires a background check in which references will be phoned and work experience will be confirmed. You can even indicate that you require a drug test and criminal background consent. Be sure that you screen for all negative behavior as this may cause problems down the line once such a candidate is hired.

Step 4. Interviewing

Once you’ve chosen which candidates to interview, you’ll want to come up with questions for each candidate. While some questions can be rather generic, i.e. “What made you want to work in this area?”, other questions will be geared toward the candidate’s actual resume.

But before you begin interviewing, you should familiarize yourself with the typical dos and don’ts of the interviewing process.

Do…

  • Ask questions to learn more about the candidate’s background and how he or she became interested in that specific line of work
  • Ask questions regarding the candidate’s future goals, i.e. where the candidate sees himself professionally in five years from now
  • Ask the candidate if any special accommodations will be needed in order for the job to get done. For example, if the candidate is in a wheelchair, ensure that you ask what alterations will need to be made to the workplace in order for the candidate to get around comfortably.
  • Check references. Be sure to call all references so that you can learn a bit more about the candidate, and any potential drawbacks that you may not have been aware of during the interview.
  • Set a salary. While this may not be specified in an initial interview, you’ll want to provide the candidate with a realistic expectation of what the job pays, whether it be an hourly rate or annual salary.
  • While you cannot ask the candidate’s age, you’ll want to be mindful if hiring someone underage. For those under the age of fourteen, there are strict rules indicating that the child can only work a few hours per day. Furthermore, those children between the age of 14 and 16 also have restricted work hours, particularly for school days. If your candidate is 17, there are less restrictions; however, if you need an employee to work past midnight, children this age cannot do so. 
  • Be aware of the significant paperwork that will need to be filled out. Therefore, when interviewing a candidate, you may want to indicate to him or her that additional paperwork will be filed if chosen for the position.
  • Ensure that your candidate is eligible to work in the United States.

Don’t….

  • Ask a candidate’s age, sexual preference, marital status, religion, or race. Even if these questions can be found on the job application, you cannot ask these questions in the face-to-face interview.
  • Ask the candidate if he or she intends on getting married or having a baby in the near future.

Step 5. Obtain Insurance

You’ll need insurance coverage when hiring someone, which can include unemployment insurance and workers compensation insurance. Also, you may wish to provide health and dental benefits to your employee, which will require additional paperwork. In addition, those in Puerto Rico, California, Hawaii, New Jersey, New York, and Rhode Island require employers to provide income to disabled employees who suffer a workplace injury; therefore, you’ll be required to purchase disability insurance if operating your business in any of these states. Such disability insurance can be either short-term or long-term.

Step 6. Report New Hires to the State Directory

This is another requirement after you’ve hired someone. According to the Personal Responsibility and Work Opportunity Reconciliation Act, all employers must report new hire data to their state’s directory within 20 days after the date of hire.

Step 7. Ensure Required Documents are Filled Out

There are many mandatory documents that all new employees must fill out and sign. This includes the following:

  • State tax withholding: Employees are subject to state income tax withholding from payroll taxes. However, be mindful that not all states in the U.S. require state income tax, including Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
  • Emergency contact form: This form will identify at least one or two emergency contacts in the event of an emergency. This will generally include the name, relationship to the employee, and telephone number of all emergency contacts.
  • Bank account form: This form will identify the employee’s bank name, account number, and routing number for direct deposit purposes. 
  • Benefits form: This document specifies health insurance, life insurance, disability insurance, and retirement plan benefits that you may offer for your new employee(s).
  • Form W-4: This is the initial form to be filled out prior to a new employee receiving his or her first paycheck.
  • Form I-9: All employers must properly document the eligibility of new employees to work in the United States. Form I-9 also provides an anti-discrimination notice, which specifies that employers cannot discriminate against certain individuals or refuse to hire someone based on someone’s citizenship status, i.e. green card vs. U.S. citizenship.

Step 8. Purchase Workplace Posters

This includes posters identifying federal and state employees’ rights. Since such rights change roughly up to 70 times a year, employers will need to keep up with the changes by replacing posters when such rights change.

After the Employee Starts

After your new employee begins working for you, you’ll want to conduct a 90-day trial on his or her performance. This should be communicated to the new employee on the very first day. While most new employees are well aware that their performance is being closely watched, you’ll want to communicate clearly with your new employee so that he or she is well aware of what is expected. You may even want to provide your new employee with an employee handbook. This handbook should be detailed and specific, including all important items such as paid time off, medical leave, career enhancement, and other items that the employee can refer to if any questions or concerns arise.

If you need help learning about what forms are required for hiring employees, or need additional assistance learning how to hire employees, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.