So you’ve just started a new business and you’re looking to hire your first employee – how exciting! With a new business comes many responsibilities most new owners need to be aware of. Here’s a checklist of important documents, notices, accounts, and policies you’ll need for success!
- Obtain an Employer Identification Number (EIN)
In the United States, an EIN is the corporate equivalent to a Social Security number. The IRS uses the EIN to identify the taxpayer. These must be used by business entities – corporations, partnerships, and limited liability companies. Most sole proprietors can get away with using their SSN, but an EIN would be beneficial to have, especially if you plan to expand your business.
- Obtain a California Employee Development Department (EDD) eServices account
An eServices account for your business allows you, as the employer, a fast, easy, and secure way to file returns, make payments, and manage employer payroll tax accounts 24 hours a day, 7 days a week.
Some benefits for having this account:
- Fulfills the new e-file and e-pay mandate for employers
- No cost to enroll and use
- Provides confirmation when your return, report, or payment is received
- Saves time by saving basic account information for future transactions
- Reduces paper and mailing costs
- Obtain a California Employee Development Department (EDD) Tax ID
Same as the EIN. It is a 9-digit number assigned by the IRS to businesses that file annual tax and other tax forms.
- Get a local business license
Business licenses are permits issued by government agencies that allow individuals or companies to conduct business within the government’s geographical jurisdiction. This gives you authorization to start a business by your local government!
- Open a business bank account
This bank account can assist with business loans, credit, savings, and a checking account specifically for companies and not for individuals.
- Obtain Worker’s Compensation Insurance through a licensed Insurance Agent
All California employers must provide workers’ compensation benefits to their employees; read these FAQs.
- Post Required Notices (Labor law Postings)
Now that you’ve started your business and have on-site offices, it is important to have labor law postings visible in common areas for your employees to see. Without these postings, you will face steep penalties. Refer to our Labor Law Posters FAQs for more information.
- Create a California Sick Leave Policy
If you are a business entity with employees in California, the law requires employers to provide and allow employees to use at least 24 hours or three days of paid sick leave per year. Employers adopting new policies to comply with the law may choose whether to have an “accrual” policy or a “no accrual/up-front” policy. If you are a business owner in the San Francisco area, there is a special ordinance in place.
- Consider creating an employee handbook
Creating an employee handbook will ease the process of onboarding new hires and keeping your employees in the know about certain policies and your company’s code of conduct. You can also use your handbook to inform your employees about the benefits that are available to them. Here are our Employee Handbook Best Practices that can assist in your creation of one. We also offer HR Support packages that include the ability to build a state and federally compliant handbook online!
- Have your employee fill out these two documents and retain them in your records
- I-9, Employment Eligibility Verification
- W-4, Employee’s Withholding Allowance Certificate
For a downloadable version of this checklist or to get in touch with one of our representative about how our services might be a good fit for your new business, fill out your information in the form below!