Hiring Employees

The amount of work involved with having employees is staggering. It’s enough to make you not want to hire anyone. Now remember, owners of Sole Proprietorships and Partnerships are not considered employees. Owners of S-Corps are classified as both owner and employee.

Each new employee will fill out an Employment Eligibility Verification (Form I-9). This form requires employees to provide identification documents (passport, driver’s license, etc.). You will then need to validate the employee’s Social Security Number (SSN or SS#) and validate the employee’s eligibility to work in the United States.

There is the Social Security Number Verification Service (ssa.gov/employer/ssnv.htm) that will verify if a name matches a Social Security Number.

E-Verify (e-verify.gov) is another service used to confirm the employment eligibility of newly hired employees. A person may have a valid SSN but not be authorized to work in the United States.

You do not need to submit Form I-9 to any government agency, but you must keep it on file. After your employee leaves the company, you must keep their form on file for one year (or three years after their start date, whichever is later).

Each employee will then need to complete and hand you an Employee’s Withholding Certificate (Form W-4). A W-4 provides the information needed for an employer to calculate how much income tax to withhold from each paycheck.

So that’s what you need to do at the federal level, but there’s still your state level. In California, you must register with the Employment Development Department (EDD). They’re in charge of the state’s payroll taxes and unemployment.

You must register at California’s EDD website (edd.ca.gov/e-services_for_business). The registration is Form DE 1. You will be assigned an EDD eight-digit employer payroll tax account number, which identifies your business for the purpose of reporting and paying payroll taxes. For every new employee, you must submit a Report Of New Employee (Form DE 34).

You must also provide pamphlets to new employees. These pamphlets explain your employee’s benefit rights.

- For Your Benefit: California’s Program for the Unemployed (DE 2320)
- Disability Insurance Provisions (DE 2515)
- Paid Family Leave (DE 2511)