Hiring Your First Employee: A Step-by-Step Checklist

Hiring your first employee is a milestone. It also turns you into an employer, with obligations that did not exist when it was just you. The steps are manageable if you take them in order. This is a general overview, and requirements vary by state and situation, so confirm the details with official sources and consider talking to an employment attorney or accountant before your new hire’s first day.

Before you post the job

• Define the role. Write down the responsibilities, schedule, required skills and how you will measure success.
• Run the numbers. Wages are only part of the cost. Add employer payroll taxes, insurance, any benefits, equipment and the time you will spend training.
• Confirm it is truly an employee role. Whether someone is an employee or an independent contractor is determined by law, not by preference. Massachusetts applies a strict test, so check state guidance before deciding.
• Know the wage rules. Federal, state and sometimes local minimum wage and overtime rules apply.

Registrations and accounts

Before you run your first payroll, you will typically need to:

• Obtain a federal Employer Identification Number from the IRS if you do not already have one.
• Register with your state tax agency for income tax withholding.
• Register for state unemployment insurance.
• Arrange workers’ compensation insurance, which Massachusetts generally requires for employers.
• Understand any state paid family and medical leave contribution obligations.
• Choose a payroll system or provider that will calculate withholding and file returns.

First-day paperwork

• Form I-9 to verify identity and employment eligibility, completed within the required timeframe.
• Form W-4 for federal withholding, plus any state withholding form.
• New hire reporting to the state, which employers are required to do within a set period.
• Required notices. Many states require written notices about pay, leave and other rights.
• Workplace posters required by federal and state law.

Keep personnel files organized and store sensitive information, such as Social Security numbers and I-9 documents, securely and separately where appropriate.

Set your new hire up to succeed

Compliance gets the hire on payroll. A good start keeps them there. Before day one, prepare the essentials:

• A written offer letter covering title, pay, schedule and start date.
• Equipment, accounts and logins ready to go.
• A short written guide to how the business works, including expectations about hours, communication and time off.
• A plan for the first week, with real work and time scheduled for questions.
• A check-in on the calendar at 30, 60 and 90 days.

Where to confirm the details

The IRS covers federal employer obligations at irs.gov. Massachusetts employers can find state requirements for withholding, unemployment insurance, paid leave and workers’ compensation on mass.gov. Because rules and rates change, check the official sources each year, and talk to a professional if your situation includes remote workers in other states, minors or unusual pay arrangements.