There are many good sources of information about the employee recruitment and selection process, including finding the right people, writing job descriptions, interviewing candidates, and managing people once they are on board. While those are all important issues, understanding your regulatory requirements as an employer's liability is crucial to the success of your business. This guide lays out 10 easy steps which highlight new employer responsibilities and necessary new hire paperwork to ensure compliance with key federal, state, and local regulations.
Step 1: Obtain an Employer Identification Number (EIN)
One of the first steps to establish and register your business is the application for a Federal Tax ID from the U.S. Internal Revenue Service. In addition to reporting taxes, the EIN is necessary when reporting information about your employees to state agencies. To obtain an EIN, you can apply online or contact the IRS directly.
U.S. Internal Revenue Service
Step 2: Set up Records for Withholding Taxes
The IRS states that you must keep payroll records and filed employment taxes for at least four years. Therefore, it is important to establish a good record-keeping system from the beginning. Also, keep good records for your business to help you monitor the progress of your business, prepare your financial statements, identify sources of receipts, keep track of deductible expenses, prepare your tax returns, and support items reported on tax returns.
Step 3: Florida Reemployment Tax Registration
Businesses with employees are required to pay reemployment taxes under certain conditions. The Reemployment Tax funds an unemployment insurance fund for those laid off through no fault of their own. Your business most likely will be liable for unemployment compensation tax if you paid $1,500 in wages in any calendar quarter, or if you employed at least one worker during for 20 weeks in a calendar year. The Florida Department of Revenue will determine whether this is part of an employer's liability when you file form RT-6. If your business is required to pay these taxes, you must register your business with the Florida Department of Revenue.
Employer liability also includes paying a quarterly tax based on the gross quarterly payroll of the employees. Information and forms are available from the Department of Revenue’s website.
Florida Department of Revenue Distribution Center
(850) 488-8422DOR Forms
Step 4: Workers' Compensation Insurance
Workers’ Compensation coverage is required for most businesses. Businesses with more than three employees and construction-related businesses with any number of employees are required to carry Workers' Compensation Insurance through a commercial carrier, on a self-insured basis, or through the state Workers' Compensation Insurance program. It provides benefits to workers who are injured on the job.
Non-construction businesses that are sole proprietors or partnerships are automatically exempt from Workers' Compensation. Officers may apply for exemption by filing the Notice to be Exempt (Form DWC 250).
Businesses in both non-construction and construction industries should remember that if those eligible choose to be exempt from Workers' Compensation coverage, and they are injured on the job, they will not receive benefits. To find out more about Workers' Compensation requirements and how to obtain proper coverage and rates, contact the Division of Workers' Compensation.
Florida Department of Financial Services
Division of Workers' Compensation
Bureau of Compliance
4415 Metro Parkway, #300
Fort Myers, FL 33916
(239) 938-1840 / (850) 413-1601
Step 5: Federal Income Tax Withholding (Form W-4)
At the time of hiring, every employee must receive and return a withholding exemption certificate (Form W-4). The form specifies the amount of income tax to withhold from the employee’s pay and to submit to the IRS. When requested by the IRS, you must make original Forms W-4 available for inspection by an IRS employee. You may also be directed to send certain Forms W-4 to the IRS. For specific information on employer responsibilities regarding withholding of federal taxes, read the IRS Employer's Tax Guide.
Step 6: Employee Eligibility Verification (Form I-9)
Federal law requires employers to verify an employee's eligibility to work in the United States. Within three days of hire employers must complete an Employment Eligibility Verification Form, commonly referred to as an I-9 form. All U.S. employers are responsible for completion and retention of each new hire's I-9 paperwork for employment in the United States; citizens and non-citizens.
Employers do not file the I-9 with the federal government. Rather, an employer is required to keep an I-9 form on file for 3 years after the date of hire or 1 year after the date the employee's employment is terminated, whichever is later. The U.S. Immigration and Customs Enforcement (ICE) agency conducts routine workplace audits to ensure that employers are properly completing and retaining I-9 forms, and that employee information on I-9 forms matches government records.
U.S. Immigration and Customs Enforcement (ICE)
Step 7: Register with the Florida New Hire Reporting Office
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires all employers to report newly hired, re-hired, and temporary (full-time and part-time) employees to a state directory within 20 days of their hire or rehire date. To report new hires, employers can use online reporting, mail or fax. Online reporting at New Hires
provides employers with a printable confirmation report within 24 hours of reporting.
Florida New Hire Reporting Center
P.O. Box 6500
Tallahassee, FL 32314-6500
Step 8: Safety and Health Regulations
All businesses with employees are required to comply with state and federal regulations regarding the protection of employees and workplace safety. The Occupational Safety & Health Administration (OSHA) outlines specific health and safety standards adopted by the U.S. Department of Labor.
Federal Occupational Safety & Health Administration
(813) 626-1177 (Tampa Office)
Step 9: Post Required Notices
Employers are required by state and federal laws to prominently display certain posters in the workplace that inform employees of their rights and employer responsibilities under labor laws. These posters are available free from federal and state labor agencies. Visit the federal government’s website business.gov for a page with information about specific federal and state posters you'll need for your business.
Step 10: File Your Taxes
Monthly and Quarterly Liability Payments
As an employer, there are several federal and state tax filing requirements that apply to you. Businesses need to ensure the proper calculation of taxes and liabilities. While this can be done through software, such as QuickBooks, it is advisable to hire an accountant or payroll processing company.
Generally, all businesses with more than $1,600 in payroll liabilities per quarter must pay their federal payroll liabilities and tax withholdings monthly. These include federal withholding, social security, and Medicare.
Each quarter, employers who pay wages subject to income tax withholding, social security, and Medicare taxes must file IRS Form 941, Employer's Quarterly Tax Return. Small businesses with an annual income tax liability of $1,000 or less may file IRS Form 944, Employer's Annual Federal Tax Return instead of Form 941.
You must also file IRS Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, if you paid wages of $1,500 or more in any calendar quarter or you had one or more employees work for you in any 20 or more different weeks of the year. New and existing employers should consult the IRS' Employer's Guide
to understand all federal tax filing requirements.
With your quarterly taxes, you will also file your Florida Unemployment Tax. The Florida Department of Revenue will send out the necessary reporting form to all employers.
You can also register
to file the tax online.
Federal Wage and Tax Statement (Form W-2)
On an annual basis, employers must report to the federal government wages paid and taxes withheld for each employee. This report is filed using Form W-2, Wage and Tax Statement. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage or other compensation.
Employers must send Copy A of Forms W-2 (Wage and Tax Statement) to the Social Security Administration (SSA) by the last day of February (or last day of March if you file electronically) to report the wages and taxes of your employees for the previous calendar year. In addition, employers should send copies of Form W-2 to their employees by January 31 for the previous year.
Get Organized and Keep Yourself Informed
Being a good employer doesn't stop with fulfilling your various tax and reporting obligations. Maintaining a healthy and fair workplace, providing benefits, and keeping employees informed about your company's policies are key to your business success. Here are some additional steps you should take after you've hired your employees:
Set up Record Keeping
In addition to requirements for keeping payroll records of your employees for tax purposes, certain federal employment laws also require you to keep records about your employees. You may be subject to state recordkeeping requirements as well. Therefore, it's good practice to set up a sound, organized system for maintaining all personnel records. Employment laws such as the Occupational Safety and Health (OSH) Act, the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), have certain recordkeeping and/or reporting
Understand Employee Benefit Plans
If you will be providing benefits to your employees, you should become familiar with the uniform minimum standards required by federal law to ensure that employee benefit plans are established and maintained in a fair and financially sound manner.
Learn Management Best Practices
While you aren't legally required to be a good manager, it sure helps when trying to recruit and retain good employees. The U.S. Small Business Administration's Guide to Managing Employees provides sound guidance on hiring, motivating, and directing employees.
Apply Standards that Protect Employee Rights
Complying with equal opportunity and fair labor standards is a requirement. Following statutes and regulations for minimum wage, overtime and child labor will help to avoid errors and potential lawsuits.