I need to hire my first employee. What do I do?
Hiring your first employee can be a daunting task as a new small business owner. If you are ready to hire you will need a legal structure and state and city business license to start. Then you will need to also:
Employer Identification Number (EIN):
Obtain an Employer Identification Number (EIN) from the IRS. This unique number is used for tax purposes and is essential when hiring employees. You can apply for an EIN online through the IRS website.
Register with Employment Security Department (ESD):
As an employer, you must register with the Washington State Employment Security Department. This registration is necessary for unemployment insurance and other employment-related services. You can register online through the ESD website.
Labor and Industries (L&I) Account:
Create an account with the Washington State Department of Labor and Industries. This is essential for workers' compensation coverage. Employers are required to provide workers' compensation insurance to employees.
Minimum Wage and Labor Laws:
Familiarize yourself with Washington State's minimum wage laws and labor regulations. Ensure that you comply with all state and federal labor laws, including overtime regulations and breaks for employees.
Employee Paperwork:
When hiring employees, you'll need to complete certain paperwork. This includes having employees fill out a W-4 form for federal tax withholding and a Washington State Employment Security Department (ESD) new hire reporting form.
Employee Benefits and Policies:
Consider offering employee benefits and establish clear workplace policies. This could include health insurance, retirement plans, and a handbook outlining your business's rules and expectations.
Payroll:
Your new employee will want to get paid so you will need to obtain payroll processing software (QuickBooks has the ability to add payroll processing) or find an accountant or payroll processing organization to do it for you.
Washington State offers a free business startup guide that gives you details on hiring employees in the state and doing payroll. You can access the guide at
https://www.business.wa.gov/site/alias__business/927/Small-Business-Guide.aspx
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