I am Ready to Hire an Employee - What do I do?

First, congratulations!!  Below is a North Carolina-specific check list.

• Prior to interviewing, review with an attorney improper questions or topics (for example, you should not ask someone if they are married).
• Prior to hiring, conduct a background check.
  • Employers can be held responsible for the negligence or intentional acts of its employees if it should have known about the employee’s background. 
  • You will need to keep personal information like social security numbers under lock and key, in a secure network, or shredded when not used.
  • If the employee will be operating a vehicle or around children, you should consider having them submit to a drug test.
• Notify your insurer.
• Prior to the employee’s first day, get any Confidentiality or Non-Compete Agreements drafted.  Do you have any proprietary systems, recipes, customer lists, etc. you need to protect?  Are you concerned that you will spend time and money training someone only to have them open a shop a mile away as your competitor?
  • Those contracts will not be enforceable if the employee is asked to sign one after their first day of work, absent a promotion or pay increase.
• Register for an IRS EIN and with the N.C. Department of Revenue (if you haven’t already).  The business will have to pay FICA Tax (social security and medicare deduction) and submit additional tax paperwork every quarter.  As the employer, you’ll be responsible for withholding the employee’s income tax from their paycheck.
  • On the employee’s first day, have them complete a W-4 and NC-4.
• Register with the NC Division of Employment Security because the business will likely have to pay unemployment tax.  https://des.nc.gov/des.  
  • You will not have to pay workers compensation insurance until you reach three employees.
  • We recommend you hire a payroll company to handle employee paychecks.  Payroll companies will make sure that your business complies with the aforementioned requirements. They will also assist you with providing tax forms and the I-9.
• Notify the state and federal government of the new hire so that, if the employee owes any back child support, his/her wages can be garnished: https://newhire-reporting.com/NC-Newhire/default.aspx
• Complete an I-9 and save for three years.  The federal government requires employers to verify that every employee they hire is eligible to work in the United States. Form can be found at www.uscis.gov.
• Upon hiring your first employee, you now have to comply with state and federal poster requirements.  The Department of Labor has a website where you can select specific facts about your business and they will tell you the posters you need: https://webapps.dol.gov/elaws/posters.htm.    State posters are found here:  https://www.labor.nc.gov/workplace-rights/employer-responsibilities/all-state-and-federal-workplace-posters
• FLSA applies to nearly every employer.  Therefore, you will be required to comply with minimum wage ($7.25) and overtime laws (depending on the type of employment).
• While an employment contract is not required, it may be helpful to define the scope of employment and provide useful information like vacation policies, for example. 
• Discrimination and wage laws are very stringent and pro-employee -- you should consult an attorney with any questions.

 
If you’re ready to hire your first employee, give Jesson & Rains a call now to ensure you are in compliance with the myriad of laws you must consider.