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until January 1st. Now’s the best time of year to switch to Homebase Payroll.Get Started

How to hire your first hourly employee

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 knowing where to get started with the hiring process—especially if you don’t have recruiters and hiring managers to lean on.

Whether you are looking for full-time or part-time employees, there are several important factors to consider in order 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. As long as you check all the items off the to-do list, learning how to hire an hourly employee shouldn’t be difficult. 

What to do before hiring for an hourly job 

Establish an Employer Identification Number (EIN)

Before you begin your application process and define your recruiting 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). Your EIN is used 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 state tax registration process for 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.

Get your 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

  • Federal tax withholding (Form W-4): The Employee’s Withholding Certificate determines how much federal income tax you will withhold from each of their paychecks. You’ll have your new employee fill this out, then you’ll submit it to the IRS—you can download Form W-4 here.

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

Define the role 

As you set out to learn how to hire an hourly employee, you need to know exactly what kind of help you need. Start by making a list of not only the tasks you expect your new employee to complete but also the responsibilities you hope they can take on in the future. 

After you’ve figured out the job, think about how much candidate experience you’d like to see from an applicant for that specific role. 

Then, do your research to determine how much to pay for this 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 in your industry. 

But you also need to consider the cost of hiring an employee and your budget. If you find that you might not be able to afford what’s usually offered, consider adding other benefits or hiring someone who is not as experienced that you can train. 

The next step before searching for candidates is to put all this research and thought into a job description to find the perfect match. A detailed description will reduce the chances of finding a potentially unfit candidate and eliminate the need for a new hire probationary period. Tip: Homebase can help you craft the perfect description and place them on the top online job boards for you. 

What to do during the hiring process 

Search for candidates 

It’s important to cast a wide net when searching for the best candidates to interview. Make sure your job ad is posted on all the top online sites, like Indeed, ZipRecruiter, and more (again, Homebase can do this for you!). 

Doing so will ensure mobile applicants looking for jobs on mobile devices will find your job posting, increasing your chances of securing someone to fill your position faster. 

Hold interviews 

Once the job applications start rolling in, you can select a few people to interview. Think about what you want to ask the applicants, aside from questions about their qualifications. For example, are you curious about how they would interact with customers? How about how they would contribute to the workplace culture you’re now building? 

What to do after hiring an employee

Set up a payroll schedule 

Learning how to hire an hourly employee doesn’t end with finding the perfect candidate. Once you’ve got the first member of your team, you need to set a payroll schedule to coordinate tax withholding for IRS. 

Your state may have guidelines around how often you need to pay employees per month. Take a look at your state labor laws to find out more.  

Choose a payroll system 

You have several options when it comes to how you complete payroll. You can do it yourself manually, use an accountant, or make life easier by using a payroll service. Doing so will save you time, especially if you find one that integrates with your scheduling and time tracking tools. 

Homebase Payroll is the perfect solution. Your timesheets instantly convert into hours and wages. Plus, when it’s time to run payroll, Homebase calculates taxes and paychecks, sends direct deposits to your team, and automatically pays and files your payroll taxes. Your employees even get on-demand access to their pay stubs, W-2s, and 1099s in the Homebase app.

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