Starting a business is an exciting time, but it’s important to make sure you do everything by the book. When you are ready to take your business to the next level by hiring your first employees, certain legal responsibilities, liabilities, costs, and paperwork are involved. Complying with these requirements will help ensure that the business runs smoothly and legally.

To assist business owners in navigating the legal aspects of the hiring process, we’ve outlined the procedures and measures they should take to ensure that they make educated decisions while remaining legal and ethically compliant.

Basics of the Hiring Process

Some questions are off-limits

It is illegal to inquire about an applicant’s age, sexual orientation, marital status, religious affiliation, or race on a written employment application or in person. However, if an applicant will require special accommodations to do a specific job, questions on the nature of a physical, emotional, or mental impairment can be asked.

References should be checked

Before making a formal employment offer, a business owner should get at least three references from the candidate. Two of the references should be professional, and one should be personal to support the applicant’s character. Then, and only then, take up the phone and call those references.

Set a salary and a classification for the employee

When it comes to paying and classifying a new employee, federal rules set clear standards. Depending on the hiring needs and budget, the employer has to decide whether the new hire will work part-time or full-time. The employer must also classify your employee as an independent contractor, common-law employee, statutory employee, or statutory nonemployee for tax purposes.

Straighten out the records

According to the United States Department of Labor, an employer is required to keep certain records on each employee for the duration of their employment. Also, when it comes to filing taxes, you’ll want to double-check that everything is in order. According to the Internal Revenue Service, an employer must provide certain tax paperwork on behalf of his employees.

Handle immigration issues with caution

Suppose an employer is sponsoring or petitioning a foreign person to work for them. In that case, they must verify and provide documentation showing the foreign national’s ability to work in the United States.

Get the right insurance coverage

Short-term disability insurance (covers 12 weeks to a year) and long-term disability insurance (covers 12 weeks to a year) are the two basic types of disability insurance (covers anything over a year). The time it takes for payments to be paid is an important part of disability coverage. An employee will typically have to wait 7 to 14 days for short-term disability. Employees may have to wait for anything from 30 days to a year for long-term disability benefits.