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How to Hire Your First Employee

One of the most exciting moments in a business owner’s career is hiring their first employee. The need to hire an employee signals the fact that the business has progressed far enough along to where help is needed to match the demands of the business. This is the moment where a business owner finally realizes the payoff to all of the hard work and planning they have put into their business. While this is a moment to be enjoyed by an owner, it is important that the proper procedures are followed for the hiring of an employee which will set the tone for how the business conducts its hiring practices in the future as it expands.


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.