Legal, Tax, and Accounting July 21, 2020

Resources on how to hire a first full-time employee?

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I'm wondering if anyone has any good resources they can point me to about the actual execution of hiring my first full-time employee.

Right now I'm a sole proprietor of an LLC in the United States, but I think there's a compelling case for me to hire a full-time developer to help me grow the business. I want to make sure I'm following the right legal process, however, and that I'm not overlooking anything from a tax, benefits, or legal perspective. Feeling like I don't know what I'm doing on that front is a big obstacle to getting me to pull the trigger.

However, when you search for guides on how to hire, almost everything is about the interview process. I'm interested more in the nitty-gritty of the technical steps to take to do this the right way. Even just a checklist of steps to follow would be great.

Does anyone know of anything like this, or could provide it themselves?

If you've already hired, what do you wish you could tell your former self about how to go about the whole process?

Thanks in advance!

  1. 2

    Short Answer: https://gusto.com/
    They do all the nitty-gritty, great customer support, worth every penny in my opinion. I believe they do benefits and insurance as well.

    Checklist (there may be more depending upon where you (and your employee) are located):

    • If you didn't do this when you incorporated, apply for an Employer Identification Number (IRS Form SS-4)

    -Register with your state's department of labor. As an employer, you have to pay state unemployment taxes (not a huge expense)

    • Obtain Workers Comp Insurance (required in most states)

    • Have your employee fill out IRS Form W-4, Withholding Allowance Certificate

    • Setup payroll: you'll need to withhold taxes based on the W-4 and also make Social Security and Medicare payments to the IRS.

    • Fill out Form I-9, Employment Eligibility Verification, and keep it on file for 3 years

    • Report each new employee to your state's new hire reporting agency (so the state can locate parents for child support payments)

    • Post any "required notices" in your office Federal notices can be found here https://webapps.dol.gov/elaws/posters.htm

    • File IRS Form 940 for any year in which you paid wages of $1,500 or more in any quarter or for any year in which an employee worked for you in any 20 or more different weeks of the year.

    • Comply with the requirements of the Occupational Safety and Health Act (OSHA)

    • Create an Employee Handbook

    • Setup any benefits you will offer: health, disability, 401k, etc.

    • Draft an Offer Letter

    Hope this helps!

  2. 1

    Would you mind giving more information about yourself and your business? Do you have a background in software engineering and what kind of service do you offer? I’ve hired many developers for my employers and more than happy to share my thoughts but I need more context to be relevant :)

    1. 1

      Thanks, Matt!

      Yes, I have a background in software engineering and have built out a product myself. The sourcing, interviewing, and selecting of the employee are all factors I'm very comfortable with. My main hold up is how to go about actual executing the hire.

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