Start-Up Employees

If you are starting a business, you will probably have employees. This checklist discusses several issues for emerging growth companies to consider when hiring employees.

When you’re prepping to hire that first employee, consider these issues:

Does your company use an offer letter to offer employment?

• • Position/title
  • Pay
  • Part-time/full time
  • Reporting responsibility
  • Responsibilities
  • Conditions for employment (forms, references, etc.)
  • At-will employee versus term and severance

Complete the Federal tax forms

• • Obtain a Federal Employer Identification Number, known as an EIN. You can do this at www.irs.gov.
  • Have new employees complete a W-4

Check state requirements

• • Have new employees complete the Federal I-9 (an employment eligibility verification form).
  • Check with your insurance provider about unemployment insurance and workers’ compensation insurance (check your State, as State requirements may vary for disability and other insurance coverages that are either required or required to be made available).

Is the relationship “at-will” employment?

• • Consider whether the Company will document the relationship.
    • Will an employee contract be written?
    • Does the employee need to assign intellectual property rights to the Company?
    • Will the employee receive an equity grant (options, restricted stock, etc.). Consider the…
      • Amount
      • Vesting Schedule / Restriction Schedule
      • Value

Hiring employees can be a challenging process, which starts with the interview. Know the questions, avoid liability and hire the talent you need. Then, get the employees started with a good “first-day” experience.