Legal Requirements when Hiring

There are numerous Federal, State and Local rules regarding hiring employees, and most large companies maintain in-house legal counsel and human resource departments to deal with these rules. But, if you are a small company, these are unaffordable luxuries. Therefore, here are some simple common-sense guidelines for hiring employees:

1.Do not discriminate based on race, color, gender, religion, handicap status, etc.
2.Respect the applicant’s right to privacy: marital situation, economic background, personal life,etc.
3.Don’t imply things you can’t deliver: job security, benefits, etc.
4.Observe all laws relating to minimum wage, hiring young or immigrant workers.
5.Follow the IRS guidelines for hiring independent contractors.
6.Follow all IRS and State new hiring requirements

Before Hiring that employee you must have done the following:

1.Obtain a Federal Employer Identification Number (FEIN)
2.Register with your State Labor or Employer Division
3.Obtain Worker’s Compensation Insurance and Disability Insurance
4.Post an “Employee Poster” as required by Federal and most State Governments

After Hiring the Employee

The following forms must be filed for every new employee:

A.Federal W-4 Form and state equivalent
B.Federal I-9 Form (verifies the legal status of the employee)
C.State New Hire Reporting Form

These forms and any other employee paperwork must be kept by the employer in an “employee file” for at least 4 years after the employees employment ends.

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