How to register a new employee

IONOS editorial team2023-09-124 mins

If you plan on hiring new employees, you need several pieces of information from them for your records. Whether you’re about to hire your first ever employee, your hundredth employee, or maybe just some temporary help over the holidays, there is quite a lot that you, as the employer, have to bear in mind.

Ensure the employee is allowed to work in the United States

First things first, before you hire the new employee, you have to make sure that they are legally allowed to work in the US. If you hire someone who isn’t allowed to work, you could face fines or criminal penalties. Here is how to find out:

You can get the employee to fill out Form I-9 before or on their first day to verify that they can work. After they have filled out the form, you will now have their contact information, Social Security number, and employment legibility.

The employee must show valid documentation with their ID and employment authorization by their third day. This could be their US passport, permanent resident card, or a combination of two documents such as their US driver’s license and Social Security card.
Form I-9 and documents should suffice for most states, although in some states your company may be required to enroll in the E-Verify program, which is a system administered by the Department of Homeland Security (DHS), US Citizenship and Immigration Services (USCIS)’ Verification Division, and the Social Security Administration. Arizona and Mississippi fall into this category, whereas South Carolina “encourages” employers to enroll, and some States such as Colorado, Idaho, Nebraska, Rhode Island, etc. require public contractors to use this system.
Employers don’t need to send Form I-9 to the federal government, but they do need to keep it in their records for three years after the person has been hired OR for a year after the person stops working for you (whichever comes later).

Have them fill out the W-4 Form

Every employee working in the United States needs to complete a W-4 Form so that the employer knows how much to withhold from the employee’s wages for federal income taxes. This is known as “withholding tax” or “payroll withholding”. From this form, the employer knows the employee’s marital status, number of dependents, and additional deduction amounts. This form must be completed before the employee receives their first paycheck. What’s written stays in effect until the employee changes it, which they can do as often as they like. This could happen after they’ve received a bonus and want to change the withholding amount. The employer keeps the form, but will have to produce it if asked to by the Internal Revenue Service (IRS).

Let your state employment agency know about the new employee

After hiring someone, you will need to report this to your state’s labor agency. Each state has an agency that takes care of labor issues, unemployment benefits, and any issues between employers and employees. By registering the employee here, the state is also able to collect child support payments a lot easier.

Sort out workers’ compensation insurance

These requirements also vary depending on which state your business is in. It’s mandatory for most employers to take out a compensation insurance in case an employee gets injured in a workplace accident or gets sick and it’s the company’s fault. This insurance ensures that employees get the medical care they require if something should happen, as well as their wages if they cannot work for a while.

Choose a payroll method

After hiring your first employee, you need to set up a system so they can receive their wages. You can do payroll yourself, through an accountant, or through a payroll service. Using the latter helps you save time and makes the whole process run a bit smoother. There are three sections to payroll: paying employees, paying payroll taxes (to the IRS and your state’s tax agency), and filing tax forms.

Display posters on employee rights

According to the Department of Labor, certain notices should be hung up in the workplace so that employees know their rights. Some states even have their own requirements on which posters need to be displayed in addition to the federal requirements. These posters are free.

Checklist for registering a new employee

Here’s a quick summary of the points you need to cover when hiring a new employee:

Verify they can work in the US by having them complete Form I-9
Have them fill out the W-4 form for payroll withdrawal
Report the new hire to your state’s labor agency
Get workers’ compensation insurance
Select a payroll method
Put up employee rights posters around the office

Click here for important legal disclaimers.

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