New Hire Paperwork: Everything You Need to Know
For new hire paperwork, there are a lot of steps. You will need to decide how you want to find potential hires and, once hired, make sure they fill out a variety of important forms including a W-4 and I-9.8 min read
3. Optional, but Recommended:
4. Withholding Federal Income Taxes with W-4 Forms
5. Verifying Employment Eligibility: E-Verify and Form I-9
6. Job Application Form
7. Registering and Withholding with States
8. New Hires Checklist
9. Employee Handbook
10. I'm Hiring, Where do I Begin?
11. Employers Vs. Contractors
12. I Found My Perfect Candidate. What's Next?
13. How do I Prepare for my New Hire’s First Day?
14. What Benefits Can I Offer?
15. What Should I Put in my Employee Handbook?
16. How Can I Make Sure my Company Stays Compliant?
New Hire Paperwork
For new hire paperwork, there is a lot of steps. You will need to decide how you want to find potential hires and, once hired, make sure they fill out a variety of important forms including a W-4 and I-9. You will also need to ensure you are withholding the proper taxes from their paychecks, reporting hires to the state, have an employee handbook, and pay the required insurances (unemployment, disability, worker’s compensation, etc.).
All new people hired need to have Form I-9. The form is for stating that they are legally allowed to work in the US. Form W-4 is used to get a new hire’s tax background for payroll purposes, as it allows the business to determine the number of exemptions to utilize for tax withholding for the IRS.
There are two sample notice documents that the United States Department of Labor uses to assist employers with complying with employment laws.
- If the company does not provide health care plans.
- If the company does provide healthcare plans to a few or all of its employees.
The employer also needs to provide information about if the business participates in worker’s compensation insurance. New hires need to be notified either way.
When gathering these documents and doing background checks, you should do it before hiring an employee. The Fair Credit Reporting Act requires notifying the potential or current hire of background checks, as well as their consent, if the investigation is done by an outside business.
Optional, but Recommended:
- An employee handbook: this has key information about the company’s policies and procedures. It also should direct employees to consult with their superiors for questions the handbook does not answer.
- Policies regarding testing and searching for drugs.
- Policies regarding monitoring by video.
- Wage contracts: these can be created either verbally or by writing. You need to therefore be careful when talking orally with employees about wages.
- You should also prepare the filings for getting certain benefits from hiring employees of specifically targeted classes.
- After the employee begins working, they ought to immediately be put into the payroll recording system. In the first 20-days after hiring you will also need to send in the new hire filing.
- Make sure the employee is signed up for the company’s benefits (insurance, etc.). Give them the proper identification and access documents to use the business’s buildings.
- Many companies also have a security deposit for returning property. This is where certain funds are kept in escrow for potential repairs and replacements of company property that is damaged while in the possession of the employee.
Withholding Federal Income Taxes with W-4 Forms
A W-4 needs to be completed by every new employee prior to getting their initial paycheck. The W-4 determines the amount of federal tax that should be withheld, based on exemptions (ex. marital, dependents, etc.). Every hire in the US needs to fill out a W-4. Each hire will have to state their marital state, allowances, and other exemptions. This form needs to be completed before the employee can be paid.
The W-4 stays valid indefinitely, only changing when the employee makes a change. State governments have a withholding form as well for the amounts of state tax that should be withheld.
Verifying Employment Eligibility: E-Verify and Form I-9
Form I-9 is important as it is required to determine if new hires are allowed to be working in the United States. Big companies that have lots of employees can use “E-Verify” to confirm the eligibility of potential hires.
The I-9, as helping determine if new hires are allowed to work in the United States, needs to be filled out by the new employee. They will need to give proof of their identity as well as their eligibility to work in the US.
Each time a new employee is hired, a new I-9 needs to be filled out. Every citizen as well as foreign national needs to fill it out if they work in the US. The new hire swears they are allowed to work in the US and that the documentation provided is real. For big businesses, the E-Verify system is very useful as it can allow you to screen employees quickly online and use government databases.
Job Application Form
Even when new hires have sent in their resume, they need to also officially fill out your employment application. The application will have details about the new hire that are verifiable (education, experience, etc.). Employers ought to ask all potential hires to fill it out.
The application has a straightforward structure that has similar inquiries for every potential hire. It lists questions that needs clear answers. It also has employees sign stating that all the information is true.
Registering and Withholding with States
Every new hire has to be registered with the state’s new hires system. The state government uses this to get alimony and other garnished payments from hires.
The state also has various procedures for how employees need to file and submit income taxes. The state will provide you details on its specific withholding paperwork and payment procedures. If the state has an income tax, you must withhold these taxes from each employee’s pay and submit these to the state government’s tax collecting agency.
New Hires Checklist
When you hire a new employee, steps you need to include:
- Get an ID for employers.
- IRS tax registration.
- Registering with your state for taxes.
The EIN is required for employers and identifies the company, similar to Social Security Numbers, to the federal government. You also must submit employer registration with the state government’s revenue department.
For filing and submitting federal taxes and reports, you can utilize the EFTPS tax system. Every new employee needs to be filed with the state government. There is a unified method for registering. Remember that each new hire has to prove their employment eligibility with an I-9.
There are also some types of insurance employers need to pay. These include worker’s compensation insurance for hires that are hurt while working and unemployment insurance for those who are involuntarily laid off. Every company has to have notices in clear public spaces so that hires can read about the rights they have.
Remember to have the new hire finish and submit the needed paperwork before they get paid. Employers need to have excellent recordkeeping of these documents and properly withhold and pay taxes, as well as file reports.
It is also helpful to have an employee handbook, although it is not required by law.
Employee handbooks ought to be given to all new hires. They ought to sign it, saying they have looked through and agree to it. Employee handbooks are helpful in general, but there are also specific legal benefits too.
If you are sued for discrimination, the employee handbook is a strong piece of evidence. Ensure that all your employees are familiar with the handbook. Keep the policies in the handbook updated.
I'm Hiring, Where do I Begin?
You ought to give all new employees a general orientation when they start.
When you write the job advertisement description, be careful to not write anything that could be seen as discriminatory. Also, be sure to have important requirements in the posting, as well as a listing of your business’ benefits. Listing benefits can help you get more and better applications.
You should also tap into your networks. Beyond your networks, look at advertising on job listing boards. However, remember that networks are beneficial because references have an added level of trust and save you costs and time through not having to go through job listings.
Make sure your application form is top-notch.
Employers Vs. Contractors
Employees and contractors are quite different.
Employees are those who do things for you where the employer can determine what is to be done and the process for doing so. Contractors are able to choose the method and end products of what they do. A contractor also often provides their own materials.
If you mix up contractors and employees, you may face punitive measures from the IRS.
I Found My Perfect Candidate. What's Next?
You should check the resume and verify the information on it. Also talk with references, who can confirm the potential hire’s experience and education. You might also want to look through the potential hire’s criminal background, as well as do a credit check. When doing the credit check be sure you are following the FCRA’s requirements.
When you officially give them a letter of employment, you should have key information such as pay, at-will status, and other vital details. In negotiations, you ought to be able to find a good compromise.
How do I Prepare for my New Hire’s First Day?
For every new employee, you should give them an orientation when they start.
- Consider a NDA. NDA’s are a contract that states private information used during the course of employment can’t be shared. Get them to sign the NDA and the employee handbook. Put the signed documents in their personnel folder.
- Make sure they clearly understand their job duties.
- The employee should also give a contact for emergencies.
- For employees that want to use direct deposit for their pay, keep careful track of their financial information and authorizations.
- Remember that an NDA can be very useful.
- The employment contract will set forth the benefits and duties of the employment relationship.
- Make sure they fill out their W-4 before getting paid. This will determine the tax withholding requirements.
- Make sure to inform the state government about your new hire. The process varies by state. Talk to a lawyer if you are confused.
- An invention contract will help you protect your intellectual properties, if you are in the business of creating inventions (products, designs, etc.).
- The employee handbook is helpful because new hires will be agreeing to the policies.
- Remember to get their I-9 to confirm if they are allowed to work in the US.
What Benefits Can I Offer?
Benefits are not required to be provided, but you can do so. There are certain rights though that are required, such as through the Family & Medical Leave Act, that provides employees the choice to take a temporary leave from their employment due to various permitted reasons.
What Should I Put in my Employee Handbook?
You ought to consult with an attorney to determine if your hiring process and employee handbook are being done in your best interest.
In your employee handbook, you should have a section on harassment that states that your business is an equal opportunity environment and the policies based on that. You should also have a safety section which states how you are complying with various state and federal safety regulations and the company’s safety procedures.
A wages section will help clarify compensation questions. A conduct section ought to broadly talk about the kind of behavior you expect of your employees in various situations.
How Can I Make Sure my Company Stays Compliant?
There are a variety of different insurances you are required to pay for your employees. These include insurance for disability, worker’s compensation, and unemployment. You can also get additional insurance to protect your business and yourself.
For certain required insurances, you are not free to choose to get the insurance or not. The Fair Labor Standards Act will determine the required insurances. Remember to be withholding the proper amount of taxes from your employees and submitting the payments and reports on time.
If you need help with hiring new employees or helping your company set up its employment compliance system, you can post your legal need to 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, Menlo Ventures, and Airbnb.