Your first hire is a scary step for any company. It comes with a lot of logistical challenges. Additionally, there are a lot of legal requirements that you have to follow or suffer hefty fines.
What is a First Hire?
A first hire is anytime you go from 0 employees to more than 0 employees. These employees can be part-time or full-time. They can be exempt or nonexempt. They can even be owners in the company if the company is a corporation.
Things to do Prior to Your First Hire
Our previous blog explains what you should complete prior to bringing on your first hire. Hopefully you will have completed all of these before you have offered someone a position in your company.
Companies are tax collectors. This lessens the burden on the government. However, it increases the cost of doing business for small businesses. When you have employees, you’re required to report and pay into the state and federal government an approximation of the taxes owed by your employees. You have to do this withholding every month. If you don’t already have an electronic account, you should set that up. Alternatively, you can hire a CPA, bookkeeper, or payroll company that can set this up for you. When bringing any employee into your company, you must get their withholdings information from them on the first day or earlier. Federally, this is form W-4. For North Carolina taxes, this is form NC-4.
Employment Eligibility Verification
Not every person is qualified to work in the United States. To be sure that your hire is legally allowed to work here, you must have the employee complete form I-9. According to the United States Citizenship and Immigration Services, employers are required to hold onto this for up to one year after the termination of the employee, but no less than three years total. The I-9 is a simple form. There are ample instructions included with it. The hardest part is making copies of certain identification documents from your employees. Be sure to read this ahead of time so you can tell you employee what to bring on their first day.
This step is simple. With your first employee, you need to hang employment law posters in a place your employees can easily see them. To obtain these posters, you have to call 1-800-NC-LABOR and ask for them. They’re free. Do not pay for these.
You’re legally required to maintain a personnel file for each of your employees. This can be physical or digital. However, it needs to be secure. There are laws governing the protection of personnel files. You should be fine if you limit access to just human resources and management. Additionally, you should train anyone with access that these are confidential. It should also go without saying, but do not use information from someone’s personnel file in a malicious manner.
New Hire Program
New employees must be reported to the North Carolina government using their New Hire Program.
Time Sheets & Scheduling
Even if you have a flexible schedule, you need to maintain a schedule for your employees. Additionally, you need to keep time sheets. Even if your employees are salaried, it is a good idea to keep the time sheets because they may not actually be exempt from overtime.
If you’d like help getting your company ready for your first hire, please feel free to contact us using the form below. Additionally, we can be reached by email at firstname.lastname@example.org or by calling 919-912-9640.