Selection & Hiring: Maintaining Compliance

There comes a time in every business when you will need to hire an employee to assist you in running your business, so it is important to understand the rules and regulations in order to maintain compliance within Federal, along with your State and industry specifics. This article is meant to assist you in understanding the basics and where you can look to find the more specific details for your business, examples provided are based on California State.

We’ll start with what you need to have in place before you hire, below I have briefly outlined each step, if you want more in-depth information on each step, you can check out my book Selection & Hiring: for first time employers

First, before you hire it’s important to perform a needs analysis this will help you figure out if you need seasonal, part-time or full-time assistance along with understanding what skills, knowledge and experience they might need in order to perform the task within the job.

Second, if you don’t have your Federal EIN yet you will need to apply for one, if you already have your Federal EIN you will need to update it due to the fact that you are hiring, it will ask you how many employees, industry, and expected wage, this is so the IRS can identify what form you will need to use in order to file and pay your payroll taxes.

Third, you will need to apply for your State Employer Tax Identification Number, you will need your FEIN when you apply for your State, unless you live in AK, FL, NV, NH, SD, TN, TX, WA, WY which have no income tax, so you will only need to acquire your FEIN for payroll.

Fourth, you will need to research payroll companies along with workers compensation insurance. When looking at payroll companies you should make sure to get pricing on full-service this ensures that the company will collect and pay both employee and employer payroll taxes. This is definitely an area you don’t want to be late or short pay. Most full-service payroll companies will also offer HR services, yes now that you have an employee you will need assistance in this area.

Fifth, we are going to jump back to the first step and dive a little deeper with your new employee’s position within the company. Hiring the right individuals is one of the most important things you will do in running your business, the right individual(s) will assist in building a stronger more efficient company, and hiring the wrong individual can cause disfunction and stagnation. This is where the analysis performed earlier will help you, you will use the information to define what you need from the individual(s) you are going to hire by designing the job description and procedure so that the individual who applies for the position will understand what you expect from them.

It sounds like a long tidus task but when it comes to hiring someone to help you run your business. assemble or sale your product, it is just as important as your product or service itself. Each step within the hiring process is extremely important in order to stay in compliance within Federal, State and Industry regulations. Non-compliance will cause penalties, and other fees along with potential levies and a notice to cease business actives.

If you need assistance in performing a needs analysis for your company or designing a job description or task procedures, you can contact us directly