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Employment Laws—Important Things You Need to Do Before You Hire Employees

Are you sure this is the path you are called to explore?


What to Expect As a New Business Owner | Know the Hiring Laws

As an entrepreneur, you may have reached that final stage towards the formation of your business.


Though it appears as simple as paperwork submissions and investment proposals, it is a daunting task with challenges from every angle—and there's more tasks to complete.

But stay encouraged; you're doing well by learning as much as you can.

You're probably eager to gain employees to service your clients and business product. Before you materialize this portion of your business plan, you should consider the extended legal requirements surrounding the hiring process of any employee in your company.

Well, there are important legal documents and methods that you must practice prior to selecting and securing an operative team of employees. Let's cover the basics to help you see all of the complexities—and whether you'd like to continue this journey.


Generating Employee Records

The US Department of Labor has established laws that require your business to possess and maintain written files of the employee data. These records include:

  • Personal Information, including employee’s full name, date of birth, social security number, mailing address, and occupation;

  • Salary and frequency of compensation;

  • Payroll deductions from each paycheck;

  • Employee work schedule;

  • Records of salary payment, including dates and amounts.

This is quite similar internationally. Explore our partnered "Labor Laws Around the World" resource to discover legal requirements in 110+ countries.

Establish Your Filing Method Before Hiring

Additionally, it is mandatory to regularly update and maintain employee records. This can become a very intricate and complex mission. Therefore, it's essential to research the method of human resources and software that is best suited for your business.


Obtain W-4 Forms From New Employees for Tax Reporting and Verification

Withholding the appropriate quantity of taxes from your employee’s salary empowers your business to meet legal tax requirements with the State and Federal governments.

Employer Identification Number

Did you obtain an Employer Identification Number (EIN) during the formation stage of your business? This is an important requirement for you as the startup or business owner—if you are hiring employees. State and Federal tax forms will require an EIN from your business, essentially with:

  • Reporting an employee’s withholding to the IRS;

  • Transferring tax funds to the IRS;

  • Paying Unemployment Insurance Tax and FICA;

  • Completing State Income Tax forms for an employee, when applicable.

Tax ID Number Requirements Elsewhere

If your business is located in another country, check out these resources to examine your requirements.

Reporting Your New Employee to the State

Based on average State laws, as a business owner, it is a requirement to report your new employee to the state within 20 days of hire. Most states use this information to ensure the employee is:

  • Compliant with any unemployment funds being dispersed;

  • Meets and child support law requirements.

Furthermore, practicing this method of reporting safeguards your legal compliance and reporting requirements.

Obtain I-9 Forms | Verify Employee’s Legal Authorization to Work

Although the I-9 Form is not a requirement for submission to the State or Federal governments, it should be obtained for your records in the event that authorities need to examine the employee’s identity and eligibility to work in the United States. The instructions for the I-9 Form explain which documents and records are needed in order to complete the forms legally and successfully.

For form requirements in other countries, please download and review the World Bank: Labour Regulations Throughout the World (pdf).


Labor Law Posters

Based on State and Federal laws, it is a requirement to place labor law notices in areas of your worksite that are readable and accessible to your employees. It is essential to ensure that your newly-hired employees have access to these areas where the notices or posters are displayed.


Purchase Worker’s Compensation Insurance

While Worker’s Compensation Insurance laws requirements vary by state, the dimension, and the trade or industry of your business, it is imperative to understand which laws apply to you as the business owner. Your business insurance broker may be able to customize your worker’s compensation insurance package in addition to other applicable insurance matters.



In summary, there are 6 main elements that require immediate attention:

  • Documentation

  • Records

  • Filings

  • Withholding

  • Physical Compliance

  • Insurance

Securing the legally required documents and information from your new employee stems from State and Federal laws in place. If the "system" pathway is a journey that you're called to take, just make sure your are compliant and prepared for the "new normal" that awaits every business owner. Moreover, it is crucial for your newly-established business to be supported by professional organization management in its early stages.

Our advice:

Consult with a business attorney that is acquainted and well-versed in business law in advance of hiring employees to build the compliancy of your establishment (according to the system's order).


Alternatively, you can save money and time by outsourcing your Business Law legal needs with us. We offer scalable contracts that you may modify as needed. Our KPO Business Law team is affluent in helping you meet the requirements of employee hiring practices that will best protect your company.

Above all, we promote a 100% remote/hybrid workforce. It's our speciality! Both urban and rural alternatives. And as you may see, hiring employees requires you to plug into the "system" more and more. Outsourcing can be the key in reducing your need to hire employees, with less requirements (such as withholding, etc.)

Contact us today and let's schedule a free discovery call for you!


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