How to Hire Your First Employee

Ensure That You Comply with All State and Federal Laws

While hiring a first employee is a good indication that a business is prospering, there are several important steps that must be taken to comply with state and federal laws. Hiring and managing employees complicates the structure of a business, but it is also the only way that a business can expand. Even sole proprietorships and partnerships eventually might find the need to hire employees in order to expand their operation, so making sure that all of the proper procedures are followed is important to maintaining compliance with existing laws.

Workers' Comp, Labor Laws, and Payroll Systems

There are several steps that need to be taken prior to and after an employee is hired. Workers' compensation needs to be set up to comply with state laws and the business will have to register with the state labor department in order to pay unemployment compensation. At this point, it is a good policy to adopt a payroll system to deduct these payments as well as:

• taxes,
• social security, and
• medicare withholdings.

Provide Benefits and Set up Employee Procedures

Other important considerations are the type and amount of employee benefits that will be offered as well as setting up employee policies and procedures and any required workplace safety requirements. Many companies make use of an employment contract to lay out the responsibilities of the employee and the company and the benefits that the employee will receive. Another important item is to create an employee handbook that details all of the company policies and procedures that the employee is expected to follow.