This article is a service of James Rose, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Foundation Audit or a STARTUP Foundation Audit for an ongoing business, which includes a review of all the legal, financial, insurance, and tax systems you need for your business. Call us today to schedule.
Up until now, you have been running your music business on your own. Now you need help. The moment when a small business owner decides to hire his or her first employee is one of triumph. But the process can be filled with trip wires and confusion. A “step forward” can quickly become a “step backward”.
First of all, congratulations! Secondly, don’t worry. Follow these steps to ensure your hiring process goes smoothly and that you follow state and federal law.
- Apply for your Employee Identification Number (EIN) online with the Internal Revenue Service if you don’t already have one. You should already have it, but you will also need it for tax purposes and to get the hiring process started.
- Prepare forms and establish a recordkeeping system for employee tax withholdings. You need to maintain records on federal income tax withholdings, your federal wage and tax statements, and your state taxes for four years. Get organized now, and don’t wait until tax season!
- Have each employee fill out an I-9 statement, and verify his or her eligibility to work in the U.S.
- Post required notices at your work site, such as state and federal labor laws.
- File your quarterly tax return (Form 941). This is required if you withhold any taxes from your employee’s earnings.
- And, perhaps most importantly, get organized! Hiring an employee means mandatory reporting, more complex tax filings, numerous legal requirements, good recordkeeping and looking out for your employee’s well-being. Now is the time to consider employee benefits, maintaining a safe workplace and keeping your employee informed on your company’s practices and their rights and responsibilities. You will also need an excellent record keeping system to keep track of important information about your employee, track labor laws, and make sure you comply with state and federal regulations.
Hiring your first employee is a big step. When you are ready, start by sitting down with us as your Creative Business Lawyer®. We can give you legal guidance before, during and after the hiring process. Developing a trusting relationship with a Creative Business Lawyer® can ensure your business complies with state and federal regulations and is positioned for success.