If you are starting to think about hiring your first employee, there are a few forms you will want to make sure you have ready.
In this Meith Minute we will briefly review forms that are required of all new hires. There are, of course, other items you will need to have in place prior to hiring, like preparing for cutting paychecks and processing payroll taxes, obtaining Workers’ Compensation insurance, working with your State to set up your New Hire Reporting account, and posting required workplace posters. We review these items in detail in other Meith Minute articles. Today, let’s focus on forms.
Application – this one may seem unnecessary, you may know the person you want to hire and even have a resume, but an application has many benefits. The most important of these is the acknowledgement. The acknowledgement is essentially a sworn statement that the information provided is accurate, that the applicant agrees to background checks, drug screens and perhaps other stipulations of employment. This provides you as the employer a way to hold the applicant accountable and be able to act if the information provided is untrue.
IRS Form W-4 – before your new employee receives their first paycheck, the W-4 form must be completed. This is the form that your employee uses to inform and determine their Federal Income Tax withholding. The form can be found on the IRS website and is available in English and Spanish. This form is typically updated annually, it would be a best practice to print these forms as needed directly from the IRS website to ensure that you are using the most up to date form. Employees may choose to update this form at anytime to change their withholding. Whenever the form is being filled out by an employee, you can not assist them, you should direct them to the IRS website.
USCIS Form I-9 – this form has many rules that need to be followed and you should familiarize yourself with them. This is the form you use to verify the identity of your employee and their eligibility to work in the United States. This is another form that would be best practice to print directly from the US Customs and Immigration Service website so you can use the most updated form. The employee can chose their own documents to use to establish their identity and right to work, and you will be required to complete Section 2 within three days of the start of employment. Even though this form comes in English and Spanish, you can only use the Spanish form in Puerto Rico. One last note: the completed form should not be kept in the employee’s Employment File, it should be kept in a separate, secured location. You can learn more details about I-9 forms from our upcoming Meith Minute: ‘I-9 Form – Am I Doing This Right?’.
State Income Tax Forms – If your business is in a State that has a State Income Tax, then you may have a State level W-4 that also needs to be completed. Not all States that collect Income Tax require their own form though. Some States collect Income Tax at a flat rate, or base the withholding on information from the completed Federal W-4 form. You will need to review your own States requirements. And to note: when the Federal W-4 was updated in 2020 to remove withholding allowances, some States that previously only used the Federal form created their own State level form to handle withholding allowances.
Becoming an employer has some very specific requirements. State and Federal agencies are there to help you with their requirements. Taking the time to learn about New Hire Forms before you start hiring will be valuable in the long run in avoiding costly penalties.