Hiring An Employee For Your Home Based Business
by admin on 06/11/08 at 11:10 pm
You’ve finally made it. Your home based business is booming and you are having trouble keeping up. You are making a steady profit and are hoping to expand your business in the upcoming year. Now it is the time to hire your first employee.
Finding the right person to bring into your successful home based business can be difficult. You will need write up a good job description and post is on job boards to get the word out. Once you get responses you will need to do some preliminary screening and interviewing. These things can be tedious and take up some time. However, it is vital that you take your time and go through all of these steps. The person that you bring aboard needs to be want you are looking for or else you will find yourself caught up in the hiring process for a long time to come.
You will need to get an employer identification number before you hire anyone. This can be obtained form the U.S. Internal Revenue Service and it will be used for the Employer Tax ID when you fill out your taxes later on in the year. Next you will need to set up records for withholding taxes.
Federal income tax withholding is completed on Form W-4. Your employee and any others that you hire will need to sign a copy and give it back to you before they can begin employment. You will need to submit Form W-4 to the IRS. Form W-2 is designated for Federal Wage and Tax Statement. Employers have to report this to the federal government for wages paid and taxes withheld from employees. You will need to complete a Form W-2 for all of your employees. You will also need to send Copy A or Forms W-2 to the Social Security Administration before the last of February. The W-2 Form needs to be to your employees by January 31rst the year after they have completed work.
You will also need a Form I-9 for employer eligibility verification. You will need to verify that your employee is legally able to work in the United States. You will need to complete an Employment Eligibility Verification Form within three days of hire. There is also a Personal Responsibility and Work Opportunity Reconciliation Act of 1996 that requires you to report all newly hired and rehired employees within 20 days of them starting to work.
You will need to get worker’s compensation insurance no matter what state you live in. Commercial carriers have worker’s compensation insurance and you can be insured on a self-insured basis. There are also Worker’s Compensation Insurance programs through different states that you can get.
Some businesses are required to pay unemployment insurance taxes. You will need to contact your state agency to find out if you need to do that. If you are, you will need to register your business with your states workforce agency. Some states require employers to get disability insurance while others do not. If you need to get some type of partial wage replacement insurance coverage do so. At this time there are only a few states that you are required to purchase disability insurance and they are California, Hawaii, New Jersey, New York, Puerto Rico and Rhode Island.
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