Before Hiring Employees

Your business is growing, and you've determined you'll need additional help. There are a few legal matters which need to be taken care of before employees can be hired.

First, you must file with the Internal Revenue Service for an employer identification number (EIN). This is also referred to as an Employer Tax ID. An SS-4 form must be filed to obtain an EIN. The EIN will be used when reporting taxes and other documents to the IRS as well as other state agencies. To contact the IRS to request an EIN call 1-800-829-4933.

Records of employment taxes are required to be kept for a minimum of 4 years by the federal government. The records will assist your preparation of financial statements and monitoring the progress of your business.

Each employee must sign a W-4, which is a withholding exemption certificate. The employer is responsible for submitting this document to the IRS. In addition, the employer is required to report wages paid to employee as well as taxes withheld to the government. This report is filed through a W-2 which states the salary, wage, or other type of compensation. Employers are must send a copy of the W-2, or Wage and Tax Statement, to the Social Security Administration. This must be done by the last day of February by mail or last day of March if electronic. They are obligated to send a copy to employees no later than the end of January.

Once an employee is hired, there will be more paperwork required, such as an Employee Eligibility Verification form. If you have questions regarding hiring employees, contact the Texas business law attorneys at the law firm of Slater, Kennon & Pugh Ltd.LLP. by dialing 512-472-2431 today.