©2023 OnPay, Inc.
Insurance offered through OnPay Insurance Agency, LLC (CA License #0L29422)
Updated: March 17, 2023
Congratulations on getting ready to hire your first employee! It’s a huge step for your company — and an exciting and daunting place to be. As a small business owner, bringing on help means getting ready to grow, but it also means taking on new legal obligations, expenses, and paperwork. We hope it also means you might get some sleep once in a while.
To get everything right, we’re here to walk you through the new hire process to avoid any snags as you go from solo entrepreneur to employer.
There are a few important steps to get your business set up before hiring an employee. While some of these take only a few minutes, others may require a little more planning ahead. Here’s what you need to do to be prepared:
Bringing in great people to build your business starts with writing a strong job description that communicates both what it’s like to work with you and the job’s responsibilities. Then, you’ll want to share that description with your network and post it where qualified applicants can find it (like hiring websites, LinkedIn, your local newspaper, or the careers page of your website).
A few things to remember as you create your job description and begin interviews:
Once the perfect candidate has accepted your offer, one of the best ways to help your first employee settle in quickly is to create a comprehensive employee onboarding process. By covering all the essential tasks that they will need to complete, they’ll feel welcomed and be better able to hit the ground running.
You’ll be handing off a lot to your first hire and a lot of things they’ll need to know are probably buried somewhere in your brain, so set time aside to explain day one. And expect that you’re going to be less productive during their first week.
Once you have a plan for training them and getting their workspace set up, you’ll have some paperwork and legalities to take care of.
It’s important to create a file for each employee and keep all payroll and related records properly filed in case of a future audit or an employment dispute. This information includes the employee’s full name and social security number, mailing address, plus payroll-related information such as pay rate, pay frequency, authorized deduction information.
You should also keep track of paystubs and payroll tax withholding. If you’re doing payroll yourself, you’ll want to add paystubs to your employee’s personnel file. If you outsource payroll, this information should be stored for you.
The tax man asks for a lot of paperwork from business owners, and becoming an employer will add a few more pages to the pile. You won’t have any immediate to-dos when you hire your first employee, but the busy work and penalties can quickly pile up if you get behind.
Here’s a quick list of all the tax forms you’ll most likely need to be ready to process and file on a timely basis. Note that requirements can vary for certain types of businesses (like farms), so make sure to consult a tax pro to make sure you’ve got all the bases covered:
Growing your team is an exciting milestone — and it’s the perfect time to put a hiring process in place for all your future employees. It may seem like a lot of work, but taking the time to onboard your first employee the right way will limit administrative mistakes and make hiring easier down the road. When in doubt, don’t be afraid to ask for help from a lawyer, accountant, or payroll provider.