So you’ve hired an employee. Now what?
The IRS has certain information required that you need to secure for your own records and forms you must complete.
First requirement is the Employment Eligibility Verification or Form I-9. This verifies that a new employee is legally eligible to work in the United States. In order to fill out this form your new employee must provide documentation for both identity and work eligibility.
The second step with the I-9 is to look at the documents provided, make sure they are adequate and filled out correctly. Then it is your responsibility to keep this form in the employee records. If you are visited by an immigration officer or labor official that wants to inspect employee documentation, this form is your proof that you’ve verified the employee’s work eligibility.
All new hires are also required to complete Form W-4 before their first paycheck can be issued. The information collected on this form includes marital status, number of dependents, and any additional withholding amounts. Using the worksheets, your employee can calculate withholding for federal income taxes.
Make sure to always use the most recent version of the W-4 form. You also do not need to keep copies of all W-4s, only the most recent one an employee has filled out. Sometimes an employee will find they need to change their dependent claims or withholding amount, and this is fine. It is your responsibility to keep track of the latest changes and ensure the employee’s paycheck reflects the newest information.
The State of Indiana also requires a State Withholding Form. The same information will apply here: number of dependents, additional withholding amounts, but also your county of residence and county of employment.
Every new employee should complete a job application form. This is suggested even if they already submitted a resume or applied another way. Your application should contain information to be used for verification, like previous employers and education, and should include work ethic statements for the new employee to read and sign. These will include validation that the information on the application is true and correct, and allow you, the employer, to conduct reference and/or background checks as needed.
Having this in writing protects you from an applicant making fraudulent claims and with their signature of acceptance, allows you to take action if needed.
There are other documents you could keep on file to make sure your employee understands what is expected of them in your company. I’ve compiled a short list that includes the required forms and also several recommended ones.
• Form I-9 (required)
• Form W-4 (required)
• State Withholding (required)
• Job Application
• Direct Deposit Information
• Employee Handbook
• Employee Benefits
As an employer, you are required to keep excellent records on payroll and payroll taxes, to withhold taxes from employee pay, and to make periodic reports and payments. Next week I’ll share exactly what you should be keeping, sending and paying to stay on track with payroll taxes.
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