After successfully running your business for a few years, you’re probably tired to doing the work of five people. Now, it’s time you hire some help so you’re doing the work of only three or four.
Before you post a “now hiring” sign in your business’s window, there’s some paperwork that must be completed, insurance that must be set up and best practices to review regarding the hiring process.
Pro tip: What you don’t know can kill your business
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Here’s an overview of what’s in store:
If you love completing stacks of forms, this step is up your alley. Numerous documents must be obtained and filed before you can hire anyone.
- Form SS-4 will grant you an employer identification number via the IRS. This number will be on many forms you issue to your employee, including tax information forms such as a W-2.
- You’ll also have to keep record of employment taxes, namely withholding taxes. You need to report to the IRS what taxes are being withheld from your employee’s wages, preferences he or she will indicate via W-2 and W-4 forms. A W-2 must be filled out and submitted every year to the Social Security Administration as a statement of the amount you are paying your employee. The W-4 will tell the IRS how much of their income the employee has chosen to have withheld every year. Additional documents may need to be filled out to withhold state and local income taxes. Don’t forget about withholding Medicare and Social Security, as well. This is all part of setting up your payroll system.
- Note that your tax documentation will change too. You’ll now need to fill out the Form 941, the Employer’s Quarterly Federal Tax Return, to the IRS when withholding income from your employees. This form is a report of the total amount you withheld from your employees (the total amount you now owe to the IRS).
- Form I-9 Employment Eligibility Verification will need to be completed for each person you hire. It verifies your employees are legally eligible to be employed in the U.S. There’s no need to submit these forms, but they must be kept on file for three years to be presented in an inspection.
- You’ll need to obtain and display worker’s rights posters in your office. These posters indicate state and federal labor laws that the employer must follow.
Even if your business is a factory of fluffy pillows, there’s a chance an employee can become injured at work. Protect your business and workers by purchasing worker’s compensation insurance. You’re required to have this coverage either through the state insurance program or through a number of commercial insurers.
The Hiring Process
Once you have all the paperwork and insurance in order, it’s time to brush up on your the rules of hiring. During the vetting process you need to know what to look for in a resume, as not all skills indicate value, and not all values will be important to the growth of your company and company culture.
When you’re interviewing candidates, you need to know which questions to ask and how to ask them. Steer clear of questions you’re legally not allowed to ask, such as ones relating to religion and sexual orientation. Form a list of questions that are important to you as related to your business and the type of answer you might hope to receive from job candidates. Make sure you gather needed information from them, such as their work load and salary expectations, and check with their references to make sure what they are telling you is true.
Keep in mind you need to appear as attractive to candidates as they should appear to you. Ensure your hiring process and credentials, such as your business credit score, are excellent to attract the best potential employees.
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