Smiling woman hiring her first employee
Congrats! You’ve taken the big leap in starting a business. Now, it’s time to hire your first employee. Here’s what to keep in mind.

Congratulations are in order. Growing a business to the point of having to hire employees is an accomplishment. But you probably have a lot of questions about hiring your first employee and making sure it’s one who will help your business thrive.

File Requisite Paperwork

Before your first hire clocks their first hours on the job, you’ll need to make sure the requisite paperwork is filed. The legal website, NOLO, lists several requisites:

  • Making sure your business has an employee identification number (EIN) filed with the IRS. (You’ll want to file form SS-4 to get an EIN.)
  • Paying your state’s unemployment compensation tax. (Visit here to learn more.)
  • Obtain workers’ compensation insurance. (Most states requires this.)
  • Set up a payroll system for tax withholdings. (IRS, Social Security and Medicare each get a cut from your employee’s paycheck; POS software can help with set up.)
  • Have your employee fill out a W4 form. This form tells the IRS how much to deduct from each paycheck—if anything at all. There have been changes to the W4 form; read this for more information. Use your POS system to file W4 forms; experts suggest having every employee review W4 forms every year.
  • Fill out Form I-9: this notifies the federal government that your hires are eligible to work in the U.S.
  • Notify your state’s hiring reporting agency. (Your state will do a check to see if your employee owes child support)
  • Poster up: you’ve probably seen those notices in business that list employee rights. You’re going to need those for your business, too. There’s both federal and state posters. (Click here for federal information and here for state.)
  • File Form 940: Hurray! More tax forms to fill out! This one is for federal unemployment tax for workers earned more than $1,500 in a quarter or worked for you more than 20 weeks.
  • Keep safety records: comply with Occupational Safety and Health Act (OSHA) requirements.

If you count the bullet points above, that’s 10 things you need to do before your employee starts working. Wow! Seems overwhelming, doesn’t it? Are you sure you want to be a small business owner? Of course you do! Once you get these tax forms and requisite requirements out of the way, hiring your first employee won’t seem like a Herculean task.

Write The Right Things To Do

Pay your first hire for coming in for an orientation. In addition to “coaching” your first employee on what to do and how to do it, you should also write an employee handbook. New hires will learn the job quicker if they have both visual and written cues. Before your first hire officially clocks in for the first time, conduct a dry-run. Pretend you are a customer. Ask the employee the most difficult questions so he or she is truly prepared for any contingency.

Make sure your emergency procedures are documented in your employee handbook.

Other things to consider in your employee manual include behavior codes. It may seem obvious that employees should not drink on the job or be under the influence of alcohol, however, don’t leave out any obvious details. Are there sartorial considerations to consider? Let your employees know how they should come to work dressed.

In addition, your employee training book should include a tutorial on using your POS system. Make sure you also show your employee how to use it in person.

Offer Incentives

Set up sales goals with your first employee. Have brainstorming sessions with your first hire to figure out innovative ways to meet these goals. And if said goals are met, give your new hire a bonus of some kind (cash, gift card, pay for a continuing education class).

Use Your Point-of-Sale To Help Manage Employees

We may be biased but we feel that one critical tool for any small business owner is having a robust point of sale (POS) system that can help manage employees. The right POS solution can manage payroll software, schedule employee shifts and vacations, store employee tax forms, and more.

Here are some other resources about small businesses and employees:

Not sure how to choose a POS and use one to manage employees? Contact us today for a demonstration.