The best employees are talented and care about your business. But you may hire someone who doesn’t fit, or the economy may change and you need to terminate your employee. If you fail to hire properly, you may wrongly terminate the relationship and find yourself in a lawsuit or governmental investigation.
To avoid employment pitfalls, follow these steps before making your first hire.
- The candidate. Hiring your first employee is almost as important as marrying the right person. Let’s look at the employee strike list: Don’t hire anyone who lies or has a negative attitude. If a potential hire left a job because of a difficult boss that may be a positive sign. And while it’s not required, employees who indicate awards on their résumés are often more likely to work above minimum expectations. Look for dean’s list awards or blue ribbons in pie baking, if you have a food service position open. If your potential hire has never achieved recognition, don’t expect him to be outstanding in your business.
- Criminal background check, credit history, and drug testing. Doing a criminal background check may keep you from hiring an unsavory candidate, and if you are hiring for a financial services job, you may want to do a credit history check. Some employers insist on a drug test as an employment requirement, just to weed out candidates with risky – and illegal – behavior. Before undertaking any of these checks, make sure you have your employee sign the right paperwork. Your employment attorney can set this up for you.
- Internet search. Before hiring, many employers search a potential candidate on Google and social media sites, such as LinkedIn, Facebook, and Twitter. It takes just a few minutes to see if your candidate has qualities you are looking for, or if there is an abundance of sketchy behavior. Avoid searches that require your candidate to give up a password, as those searches may cross the line into privacy. As always, a local employment attorney can make sure you’re following the rules.
- Legal documents. For your first employee position, you will want to contact the IRS to obtain an Employer Identification Number (EIN), which is also called your Employer Tax ID or Form SS-4. You will want to set up a good record-keeping system to maintain your employee’s W-4 withholding form and W-2 forms which show how much you paid employees each year. You will also have to set up state workers’ compensation insurance and unemployment insurance taxes, and in a few states you will be required to pay temporary disability insurance.
- At-will. Many employers like the convenience of having at-will employees who can be released from employment for almost any reason. If you want to set up at-will employment, make sure to check with your local employment attorney because some states have exceptions, such as the “public policy” exception that means you are not protected if the employee is asked to do something that violates public policy. Another thing to watch out for is language in your employee handbook that gives reasons for firing, such as drunkenness, that mean you are creating a “just cause” workplace and may not be able to terminate your employee at-will. A few minutes with your employment attorney will ensure you are protected.
- Three day rule. Within three days of employment, you must verify your new hire is eligible to work in this country by filling out a Form I-9. You are also required to report all new hires to your state registry and post labor law posters.
If you follow these simple steps, then your first hire has the potential of being a success. Best of luck with your growing business!
