Hiring and the Law —Hiring a New Employee

Devora L. Lindeman, Esq., Partner at Greenwald Doherty LLP, is providing us with insight and information regarding the hiring process. Ms. Lindeman is a management-side employment lawyer and has exclusively represented managers and companies in federal and state agencies and courts with regard to their labor and employment needs for many years.

Questions addressed to Ms. Lindeman may be addressed in this column.

Hiring and the Law
By Devora L. Lindeman, Esq.*

Question: I’m hiring my first employee. What do I need to do?

Answer: There are quite a number of things that a business should do when it hires an employee for the first time. Although requirements vary state to state in the U. S., here are some things all new employers will likely need to do:

— Obtain an EIN (Employer Identification Number) from both the IRS and your state taxing authority so you can file your employment taxes. Your accountant may be able to assist with this.

— Coordinate with your accountant to be able to write payroll checks and withhold appropriate taxes for the federal government, as well as your state and locality. You may want to consider signing up with a payroll company, such as Paychex or ADP, but usually employers do not want to take this step with only one employee.

— Register with your state Department of Labor (or other applicable agency) with regard to Unemployment Insurance taxes. This is also something your accountant may assist with.

— Obtain Workers’ Compensation Insurance. Some states offer insurance through a state insurance fund and employers usually have the option of obtaining that insurance or private insurance. Consult with your insurance broker to determine the workers’ comp insurance that is appropriate for your company. Most states require this coverage if you have only one employee (although if you, the owner, are the only “employee” coverage is often not required or there is a way to opt-out).

— Register with your state’s New Hire Reporting agency. The Small Business Association has links to the state agencies on its website, here: New Hire Reporting for Your State | SBA.gov. This requirement is in place to find dead-beat-dads who are not paying child support, among other reasons.

— Obtain Short Term Disability Insurance if your business is in one of the locations which require it (currently New York, New Jersey, California, Rhode Island, Hawaii and Puerto Rico). Consult with your insurance agent.

— Determine what employment posters and notices you need to post in your workplace. Both state and federal laws require notices about discrimination in the workplace, wage and hour laws, and other legal issues be posted. These are often in an employee lunch room, or other location where employees would see them. There are many poster services on the internet.

— Ensure that your applicant paperwork is legally compliant. Yes, you probably can pick up a job application at Staples, but that does not guarantee that the form asks the questions that are pertinent to your business, or that are legal in your state. Educate yourself about the employment laws of your state. Often, your state will have a website with answers to questions about these issues.

— Some states have requirements regarding information that needs to be provided to new hires when they start working, generally about things like their compensation and pay days. Some states require that this information just be provided. Others require that it be in writing and that you have proof that it was relayed. An internet search for “new hire requirements [your state name]” can provide helpful information.

Although this may seem overwhelming at first, hiring your first employee means that your business is growing and expanding which is a good indicator. Both your accountant and your insurance agent can help you get things in place that are needed when hiring employees. As you expand, having an employment lawyer can also help you ensure compliance with the various employment laws. You want to make sure that you lay a good foundation and do things right from the start.

*Ms. Lindeman is a Partner at Greenwald Doherty LLP, a law firm that exclusively represents businesses in all aspects of labor and employment law.  These columns are intended to be general information regarding the topic discussed and are not to be considered legal advice regarding a specific situation. Contact a management-side employment attorney familiar with the law of your jurisdiction for specific advice.  Ms. Lindeman is admitted to practice law in NY and NJ and may be contacted at DL@greenwaldllp.com.  She is under no obligation to respond to reader inquiries personally, but may answer general employment law questions through this column.

© 2011 Greenwald Doherty.  May not be reprinted without permission.

As the law varies in each area, please check with an attorney to ensure you are applying these tips within the law.

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