How to hire hourly employees from start to finish

When your business gets to the point where you can no longer manage all the work on your own, it’s time to take the next step and figure out how to hire an hourly employee to help. If you don’t know how to hire an hourly employee, it can be a little intimidating to figure out where to start with the hiring process — especially if you don’t have recruiters and hiring managers to lean on. Whether you’re looking for full-time or part-time employees, there are several important factors to consider to ensure everything is set up correctly and legally. There are things you need to do as a business owner both before you hire hourly workers and after you’ve filled your job opening. And as long as you check all the items off the to-do list, learning how to hire an hourly employee shouldn’t be difficult.

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3 steps to take before hiring hourly employees

Don’t be alarmed by all the acronyms and numbers in this section. Getting set up to hire employees is straightforward — there are just a few things to remember. That’s why we’ve broken it down into three steps for you.

1. Establish an Employer Identification Number (EIN)

Before you begin your application process and define your recruitment strategy, the IRS requires that you register your business. Once you do so, you’ll receive a 9-digit tax ID number called an Employer Identification Number (EIN). You’ll use your EIN for payroll tax reports and payments. To get an EIN, apply online on the IRS Employer ID Numbers webpage. You’ll also need to undergo the tax registration process of the state where your employee works. To learn more about how to register, visit your state’s Department of Labor website and your state’s unemployment insurance website. In many cases, you can apply online.

2. Get your new employee paperwork in order

Learning how to hire an hourly employee comes with an onslaught of tax considerations and other paperwork. Make sure you have your new employee forms ready to go before finding the perfect candidate for your hourly work:

• The Employee’s Withholding Certificate (Form W-4): This form determines how much federal income tax you have to withhold from each of your employee’s paychecks. Your new employee will have to fill out this form, and then you’ll submit it to the IRS. You can download Form W-4 here.
• The Federal Wage and Tax Statement (Form W-2): You’re required by law to complete a Form W-2 for all your staff members. The form details annual earnings and taxes withheld. You can learn more about Federal Wage and Tax Statement forms here.
• State tax forms: You may be responsible for state taxes depending on where you live. Check out the IRS State Tax Withholding Forms website to learn more about what’s required in your area.
• Form I-9: Every new hire must complete the Employment Eligibility Verification form, also known as Form I-9. Click here to download the form.

Make sure you have a good system in place to store your documents so you stay compliant with federal and state laws. You can also take a look at the Small Business Administration’s (SBA) “Hire and Manage Employees” page to verify you’ve got everything in order.

3. Clearly define your open position

As you set out to learn how to hire hourly employees, determine exactly what kind of help you need. Start by making a list of not only the tasks you want your new employee to be responsible for but also the responsibilities you want them to take on in the future. After you’ve figured out the specifics of the job you’re hiring for, think about how much experience applicants would need to successfully fulfill the role. Then, do some research to determine the salary you want to offer for your open position. You can take a look at the US Bureau of Labor Statistics overview of wage data by region and occupation to get an idea of what the norm is for your industry. But you also need to consider the cost of hiring an employee and your budget. If you can’t afford what competing businesses are offering, consider adding other benefits into your compensation package or hiring someone who’s less experienced but can be trained. The last step before searching for candidates is summarizing all your research in a concise job description so you can find the perfect new team member. Tip: Homebase’s hiring and onboarding tools can help you craft the perfect job posting, publish it on several top job boards, and even manage the interviewing and onboarding process.

What to do during the hiring process

To find the best candidates quickly, you’ll need to look for the right people in the right places. Here are some tips on how to advertise your position and select the best candidates for interviews.

Search for hourly candidates

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Hold interviews

Once the job applications start rolling in, you’ll have to select the top candidates you want to interview. Use a screening process to eliminate applicants who’d likely be a bad fit for your business — for example, a solution like Homebase lets you ask candidates pertinent screener questions from within the app. Screening is important as it reduces the number of no-shows at interviews and makes the whole recruitment process more streamlined and efficient. Next, think about what you want to ask job applicants to understand what they’re really like as employees and how they’ll fit within your team. Be sure to check what you want to ask against the list of unacceptable questions as per state and federal law. Also, brush up on interview best practices to ace the interview and get candidates excited about working with you.

What to do after hiring an employee

Learning how to hire hourly employees doesn’t end with finding ideal candidates. As your team grows, you’ll need to set up or refine your payroll schedule and system.

Establish a payroll

To run your first payroll, you’ll need to find a payment schedule that works for you and your new employees. The best and most common payroll schedules are once or twice a month, but your state may have guidelines on how often you need to pay employees. Take a look at your state-specific labor laws to find out more. Consider leaving a delay between your pay period and your payday so you can double-check hours and tips and give yourself some breathing room. This practice is called payroll in arrears, and it’s a legal way to make running payroll easier. But don’t forget to tell your employees about policies like these so they clearly understand how and when they’ll get paid. With Homebase payroll, you can reduce the delay between your pay period and payday. The tool instantly converts timesheets into hours and wages so you can work more efficiently and pay employees as quickly as possible.

Choose a payroll system

You have several options when it comes to managing and carrying out payroll. You can do it yourself manually, use an accountant, or make your life easier by using a payroll service. Doing so will save you time, especially if you find a platform that integrates with your scheduling and time-tracking tools. Homebase payroll is the perfect solution. When it’s time to run payroll, Homebase calculates taxes and paychecks, sends direct deposits to your team, and automatically pays and files your taxes. Our app even gives employees on-demand access to their pay stubs, W-2s, and 1099s.

Hiring hourly workers can be a breeze

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