Hiring a new employee means you’re going to have a lot of new hire forms to fill out. In fact, the employee cannot work or get paid if some of the forms aren’t finished.
Each employee must complete each of the forms in order for you to stay compliant. In this article we’ll cover the forms you need completed, as well as a few optional best practice forms. We’ll also cover the federal regulations on how to store these documents.
Register as an employer
If you’re hiring employees for the first time for your new business, you must first register with the IRS. The two-step process looks like this:
- Employer ID Number: When you register with the IRS as an employer, you’ll get an Employer ID Number (EIN), also known as a Federal Tax Identification Number. You need your EIN for payroll tax reports and payments. You can apply online for your EIN by visiting the IRS Employer ID Numbers webpage.
- IRS Payment System: After you receive an EIN, you’ll join the Electronic Federal Tax Payment System. Here you’ll deposit taxes from both employee check withholdings and from your business. You can join by visiting EFTPS.gov.
Once you’re all squared away with the IRS, it’s time to collect the forms you need when you’re ready to hire new employees.
New hire Form W-4
The purpose of the Form W-4 is to determine the employee’s federal income tax withholding. The information the employee gives you will tell you how much pay you should withhold.
New hires must complete this form before they can receive their first paycheck. It’s important to remember that as an employer, you should never give employees advice on how to fill out the form. But, there is a helpful IRS article that answers frequently asked questions about the Form W-4. You can direct them to the link so they can make the best decision.
Employees can change their W-4 as many times as they wish. One instance in which an employee may want to change their information is if they receive a bonus.
Keep track of the latest change made to any employee’s W-4. Make sure their paychecks reflect their withholding wishes. Also, make sure the employee’s Social Security number is correct on the form. You can do so using the Social Security Administration’s Verification Service.
New hire Forms I-9 and E-Verify
You’ll need to verify and document your new hire’s eligibility to work in the United States. This is where the Form I-9, Employment Eligibility Verification comes into play. Every new hire must complete the Form I-9. To do so, the employee must provide documentation of identity and work eligibility.
- First, the employee fills out the form and states what eligibility documents they will use.
- Next, you review the documents and verify they are adequate, and you fill out your part of the form.
Note: It’s very important to keep these records. Failing to do so puts you at risk for heavy penalties from the federal government.
The E-Verify system is an online system that allows employers (mainly employers with many team members, but anyone can use it) to confirm the eligibility of their staff to work in the U.S. The information provided by the employee on the I-9 is electronically matched against Social Security Administration records and the Department of Homeland Security.
E-Verify is voluntary. But if you have a federal contract or subcontract that contains the Federal Acquisition Regulation, it’s required.
Direct deposit enrollment
If you have direct deposit and your employee wishes to enroll, they will need to fill out a form like this downloadable version.
The direct deposit form should include:
- Bank account number
- Routing number
- Type of account (such as checking or savings)
- Bank name and address
- Name(s) of account holders
Note: If you have an HR management platform, the system will take care of the required forms for you during the new hire’s onboarding. This includes the W-4, I-9, direct deposit enrollment, and more. Consider implementing one of these systems to make your hiring process run smoother.
Job application form
Regardless of whether the employee submitted a resume, they should also complete a job application. This way you can verify information, including previous employers and education background.
The application form is the best way to protect yourself from any fraudulent claims. Having the employee sign the form means that you can perform a background check. Their signature also states that the information on the application is accurate and honest.
Download a generic application form.
State employment agencies
You must register all new employees with your state’s new hire notification system. Doing so allows the state to collect child support payments from the employee if needed. Check out the U.S. Department of Health and Human Services webpage to learn more about how to register.
You may also have to register with your state’s labor department to pay state unemployment taxes. You pay this tax into a fund, which is dispersed to your employees if you lay them off. Contact your state’s labor department to learn more about how to register.
One last thing. You must register with your state’s worker’s compensation agency to pay into the fund for employees who get hurt or sick at work. Contact your state’s worker’s compensation agency to learn more about how to register.
It’s best practice to have a standard employee handbook that contains policies and procedures you and your employees follow. Give your new employee a copy of the handbook and have them sign a contract that they have read it. Click here to download a generic handbook contract form.
Once the employee has signed the handbook contract, it becomes a legally binding document. If you have a policy manual in place, you can prevent potential issues with disgruntled employees, and even possible lawsuits.
How to store new hire forms
In most cases, you won’t have to submit new hire forms to the government. But you do have to hold on to them—failing to do so the correct way can lead to heavy penalties. Keep the completed forms in an accessible location for anyone who needs to take a look at them.
Take a look at the U.S. Department of Labor Wage and Hour Division’s recordkeeping requirements for employee records, as well as the IRS employment tax recordkeeping requirements to make sure you’re following all of the rules and staying compliant.