Step 7: Employer Responsibilities
There are many good sources of information about the employee recruitment and selection process, including finding the right people, writing job descriptions, interviewing candidates, and managing people once they are on board.
While those are all important issues, understanding your regulatory requirements as an employer's liability is crucial to the success of your business. This page lays out new employer responsibilities and necessary new hire paperwork to ensure compliance with key federal, state, and local regulations.
Obtain an Employer Identification Number (EIN)
In addition to reporting taxes, the EIN is necessary when reporting information about your employees to state agencies. To obtain an EIN, you can apply online or contact the IRS directly.
Organize and Maintain Employee Records
It's good practice to set up a sound, organized system for maintaining all personnel records.
The IRS states that you must keep payroll records and filed employment taxes for at least four years.
In addition, you may be subject to state recordkeeping requirements. Employment laws such as the Occupational Safety and Health (OSH) Act, the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), have certain recordkeeping and/or reporting requirements.
Register with the Florida New Hire Reporting Office
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires all employers to report newly hired, re-hired, and temporary (full-time and part-time) employees to a state directory within 20 days of their hire or rehire date. To report new hires, employers can use online reporting, mail or fax. Online reporting at New Hires provides employers with a printable confirmation report within 24 hours of submission.
Federal Income Tax Withholding (Form W-4)
At the time of hiring, every employee must receive and return a withholding exemption certificate (Form W-4). For specific information on employer responsibilities regarding withholding of federal taxes, read the IRS Employer's Tax Guide.
The W-4 form specifies the amount of income tax to withhold from the employee’s pay and to submit to the IRS. When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee.
Employee Eligibility Verification (Form I-9)
Within three days of hire, Federal law requires employers to verify an employee's eligibility to work in the United States by completing an Employment Eligibility Verification Form, commonly referred to as an I-9 form.
An employer is required to keep an I-9 form on file for 3 years after the date of hire or 1 year after the date the employee is terminated, whichever is later. The U.S. Immigration and Customs Enforcement (ICE) agency conducts routine workplace audits to ensure that employers are properly completing and retaining I-9 forms, and that employee information on I-9 forms matches government records, but the employer is not required to file the I-9 form with the federal government.
For more information, contact the U.S. Immigration and Customs Enforcement (ICE).
You should become familiar with the uniform minimum standards required by federal law to ensure that employee benefit plans are established and maintained in a fair and financially sound manner.
Required employee benefits (vary by state):
Social Security taxes: Employers must pay Social Security taxes at the same rate as their employees
Workers’ Compensation coverage is required for most businesses. Businesses with more than three employees and construction-related businesses with any number of employees are required to carry Workers' Compensation Insurance through a commercial carrier, on a self-insured basis, or state Workers’ Compensation Program. It provides benefits to workers who are injured on the job.
To find out more about Workers' Compensation requirements and how to obtain proper coverage and rates, contact the Division of Workers' Compensation.
Non-construction businesses that are sole proprietors or partnerships are automatically exempt from Workers' Compensation. Officers may apply for exemption by filing the Notice to be Exempt (Form DWC 250).
Leave benefits: Most leave benefits are optional outside those stipulated in the Family and Medical Leave Act (FMLA)
Unemployment insurance: Businesses with employees are required to pay unemployment insurance taxes under certain conditions. The Florida Department of Revenue will determine whether this is part of an employer's liability to participate in the Florida Reemployment Tax program.
Disability Insurance: Disability pay is required in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico
While you aren't legally required to be a good manager, it sure helps when trying to recruit and retain good employees. The U.S. Small Business Administration's Guide to Hire and Manage Employees provides sound guidance on hiring, motivating, and directing employees.
Complying with equal opportunity and fair labor standards is a requirement. Following statutes and regulations for minimum wage, overtime and child labor will help to avoid errors and potential lawsuits.
Safety and Health Regulations: All businesses with employees are required to comply with state and federal regulations regarding the protection of employees and workplace safety. The Occupational Safety & Health Administration (OSHA) outlines specific health and safety standards adopted by the U.S. Department of Labor.
Post Required Notices: Employers are required by state and federal laws to prominently display certain posters in the workplace that inform employees of their rights and employer responsibilities under labor laws. These posters are available free from federal and state labor agencies. Visit the U.S. Department of Labor for a page with information about specific federal and state posters you'll need for your business.