Steps For Hiring an Employee

Oftentimes business owners make the mistake of rushing through the process of hiring an employee. The owner focuses solely on hiring someone without first making certain that the owner is protecting the business (and the owner’s personal assets). This article focuses on employees and not independent contractors (note: the law looks generally disfavorably upon independent contractors, and there are legal tests that must be met to lawfully classify a worker as an independent contractor).

Best practice is first to form a legal entity such as a corporation or an LLC (limited liability company). The type of entity structure you would choose depends on several factors, and it is prudent to consult with both your accountant and your business attorney. Once you have your legal entity properly formed, and you have obtained the necessary federal employer identification number and the state tax ID number, then you will want to obtain worker’s compensation insurance (mandatory), employment practices liability insurance (best practice), director and officer liability insurance (best practice), commercial general liability (best practice) etc., and obtain a Minnesota unemployment insurance employer account number.

Then you should put together a job description that includes lifting requirements for each position (note: this is critical for worker’s compensation and disability discrimination claims). In addition, you most likely should have an employee handbook that you have drafted prior to the employee starting work. Furthermore, if you are requiring your new employee to sign a non-compete, non-solicitation or some other type of agreement, at the time of the conditional job offer, you need to provide that agreement to your prospective employee. The agreement has to be provided with enough time for your new employee to seek legal counsel regarding that agreement prior to starting to work for your business. It is also prudent to make certain that you have the right employment posters that need to be displayed at your workplace so that employees can easily see them.

On the first day of employment it is best practices for the employee to complete the Federal Form W-4 (and in some circumstances Form W-4MN) and Form I-9. In addition, if your employee is signing a non-compete, non-solicitation or any type of agreement that document also needs to be executed on the first day of employment. Furthermore, you need to ask your employee whether they have court-ordered child support, etc. that needs to be withheld from their paycheck, and the terms of any court order.

Within 20 days of the date that an employee was hired, you need to submit the new employee hire to the Minnesota Department of Human Services.

Spangler and de Stefano, PLLP assists clients with employment issues, such as proper classification, employee handbooks, non-compete agreements, etc.

The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.