What New Business Owners Need to Do Before They Make Their First Hire
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Are you a new business owner? What do you need to know before hiring your first employee? Who should you hire first when starting your small business? Should you start with freelancers, independent contractors, temp employees or full-time employees?
You will need to understand that the choice you make will come with its own implications. The things you need to put in place before recruiting for your startup as a small business owner may not completely apply to big-brand companies setting up a new branch in the international market.
In case you choose to start with temp employees, you will need to avoid any hiring mistakes while enjoying all the benefits of hiring temporary employees.
If you are opening a restaurant, a store or any other small business, this may be your first time as a true boss. You’ll be more than a manager. You’ll be responsible for employees, and that brings with it a ton of legal responsibilities.
Who Will Handle Payroll?
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Before the first employee is hired, you need to decide who will handle payroll. There’s much more to it than just cutting the check each week or each month. You have to know how to withhold federal income taxes, Social Security and Medicare. Some 43 states in the United States also have their own income tax. Then there are large cities that have an income tax.
With each type of tax, there are rules and regulations. You have to be sure that payroll is done correctly every time or you could face a fine. If not a fine, it may be an angry employee who was given the wrong advice about withholding. An unsatisfied employee might sue you if they discuss that they are paying the consequences of your negligence.
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You may plan to handle this yourself. If so, you should be ready to do some serious math. This is not a one-size-fits-all process, and you’ll need to have answers ready for employees who have questions. In a large operation, that would be the job of human resources, but you don’t have the staff for that.
Payroll administration is one of the key services every company expects from its human resource department. If you are on a low budget and your startup can’t afford to recruit one yet then you must be ready to do a lot of work.
To take care of these issues, you could hire a payroll and bookkeeping firm. They already have the answers, and they will make it easier for you. This is because they have been able to convert all their accounting books from paper to digital such that with a click of the button, a lot can be processed in a few seconds. There are also individuals who provide these services. Before you hire anyone, you may want to find a certified public accounting firm near you or an individual who can handle these jobs for you.
What Are Your Responsibilities to Employees?
As a small business with under 50 employees, you won’t be required to provide health care for your workers. However, in the U.S., there is a program administered through the Small Business Administration that can help you afford this if you want to offer it as an incentive to mostly low-wage workers.
You shouldn’t purchase anywhere else, by the way, or you won’t get the tax break. This is because the Small Business Administration is here to help your business grow. So, not taking advantage of that is like short-circuiting your business growth.
Most employers must adhere to minimum wage laws. This is super important as a new business owner. You’ll need to find out which wage requirements apply to you. If you plan on hiring teenagers, you need to know the minimum age that children are allowed to work in your city and state.
You’ll need to find out whether you’ll be required to pay into the workers’ compensation fund or unemployment fund in your state. That also implies that you will need to know who is eligible for workers’ compensation insurance in your state and city.
It’s important to find out what other rules and regulations may apply to employees in your type of business. This isn’t as simple as purchasing wood mats and hard hats for your construction site. Your business may be subject to stringent safety or environmental requirements that impact your workers.
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There are also licensing issues. Perhaps you are starting a business that requires a specific license, and this may affect employment. For instance, if you have a liquor license, you can’t have anyone under 21 waiting on tables or behind the bar. If you get a daycare license, your employees may be required to take certain classes and have certifications in such things as CPR and First Aid.
Needless to say, you should know everything you can about all of these issues as they apply to you before you make your first hire. The list of things needed to start a business in Switzerland is not the same when launching a new small business in the United States. You’ll be glad you laid the groundwork to do things right because nobody is going to tell you how many employees you need to hire – it’s totally up to you as the new business owner.
