Forms You Must Have New Employees Complete at Hire
W-4, I-9, Job Application, State Registration, and More
Your first responsibility for paperwork and regulations for new employees comes immediately after hire. Before the employee starts work and receives their first paycheck, there are some forms you are required to have the employee complete. These forms must be completed by every employee to comply with federal and state laws.
First, Register as an Employer with the IRS
Before you start the process of hiring employees,
1. Get an Employer ID Number. You must register with the IRS as an employer by getting an Employer ID Number (EIN). This number is a general number that almost all businesses must have for payroll tax reports and payments. You can get an EIN quickly by applying online.
2. Join the IRS Payment System. Speaking of payments, after you have your EIN, you'll need to join the IRS Electronic Federal Tax Payment System (EFTPS). You will need to deposit employment taxes from employee withholding and from your business using this EFTPS system.
See this article on making payroll tax deposits for more information on what taxes must be paid and when.
Now you're finally ready to start gathering the forms and other registrations you'll need for your new employees:
Effective January 1, 2020, you must use the new W-4 form for:
- New hires and
- Current employees who want to change their withholding.
This article details the new W-4 form and how to use it to calculate federal income tax withholding.
Form W-4 gives you employee information for income tax withholding from their paychecks. You can download and print the form or order multiple copies from the IRS.
All new hires must complete Form W-4 before receiving their first paycheck. Employees hired before January 1, 2020, don't need to complete this form.
Employers should not give employees advice on how to complete this form, but you can direct them to an IRS article with answers to frequently asked questions, which includes a Tax Withholding Estimator (calculator).
Employees may change their W-4 form as often as they like. For example, an employee may receive a bonus and want to change withholding. It is your responsibility as the employer to keep track of the latest change and to make sure employee paychecks reflect the wishes of the employee for withholding.
As an employer, you must document the eligibility of new employees to work in the U.S. The document you must use is Form I-9, Employment Eligibility Verification, which must be completed by each new hire. The new employee must provide documentation of (a) identity and (b) work eligibility.
There are two steps to the I-9 process. First, the employee fills out the form and states what identity and work eligibility documents will be used. Then, you as the employer must look at those documents and make sure they are adequate and appropriate.
You must keep this form in the employee's record, but you don't need to send it to anyone. If an immigration officer comes to your company or wants to inspect your employee documents, the form is your proof that you verified the employee's work eligibility.
Larger employers (with many employees) can sign up for the E-Verify system and use it to check on the eligibility of new employees to work in the U.S. The system uses the information on Form I-9 to compare with federal databases.
Each new employee should complete a job application form, even if this person has already submitted a resume for the job. The job application form contains information about the new employee that can be verified, like previous employers and education. It also includes several statements the applicant must sign.
One statement on the application form requires the employee state that the information on the application is true and correct, while other statements allow the employer to conduct reference checks and background checks.
Having an application form for every employee protects you as an employer from an applicant making fraudulent claims, and allows you to take action if the application form is not accurate.
Register With State Employment Agencies
State new hire registration system. Employers must register new employees with their state's new hire notification system; this registration allows the state to collect child support payments from these employees. The U.S. Department of Health and Human Services has information about how to register new hires with your state.
State employer registration. Each state that collects income taxes has requirements for employers to report and pay those taxes. For states that have an income tax, you will need to deduct these taxes from employee paychecks and send the withheld taxes to the appropriate state agency.
Contact your state's taxing agency for information on how to register as an employer in the state. This state agency will also give you information on withholding forms and requirements for reporting and paying withheld amounts.
State unemployment tax. You may also need to register with your state's labor department to pay state unemployment taxes as an employer. This tax is paid by employers (not employees) into a fund that pays employees if they are laid off from your business. Payment rates are based on the number of employees and experience of comparable businesses. Contact your state's labor department for more information.
State worker's compensation. State worker's compensation pays employees who are injured or become ill on the job. You must register with your state's worker's compensation agency and pay into the fund. Contact your state's worker's compensation agency for more information.
Every business that has employees must have these federal workplace posters displayed in a place where employees gather (like a break room):
- A Family and Medical Leave Act poster (for employers with 50 or more employees)
- An OSHA (Occupational Safety and Health Act) poster, for all employers (some states have their own plans and posters)
- A Fair Labor Standards Act poster from the U.S. Department of Labor, for all employers
- A Notices to Workers with Disabilities Act/Special Minimum Wage poster from the Department of Labor, for employers who have workers with disabilities.
- An Employee Polygraph Protection Act poster from the Department of Labor.
You can order these publications from the U.S. Department of Labor, or check out this DOL eLaws poster advisor to help you figure out which notices you must post at your workplaces.
All employers should have an employee handbook or policies and procedures manual. All new employees should receive a copy of this handbook and should sign that they have read and understood it. The employee handbook becomes a legally binding document for both you and your employees. A policy manual given to all employees can help prevent disgruntled employees, unmet expectations, and possible lawsuits.
What to Do With These New Hire Forms
In most cases, you don't need to return the forms to anyone, but you must keep them. When these forms are completed, you should keep them in a specific location, available to employees and others who need to see them. They may be part of an audit by a state or federal agency.
The U.S. Department of Labor (under the Wage and Hour Division) has specific requirements for employee records that must be kept on all employees.
The IRS has recordkeeping requirements for employment taxes.
Federal, state, and local agencies can audit your employee records for a variety of reasons, so keeping records is important.