Growing your business to the point that you need to start hiring employees is exciting. It’s also rife with administrative burdens that you don’t want to be unprepared for.
When taking on a new hire, you need more than 1) the assurance your cash flow is sufficient to support your payroll expenses and 2) that the talent is the right fit for the role. There are governmental obligations to consider, as well as fitting your new employee into your existing schedule and structure. Small businesses face additional challenges when it comes to compliance, cash flow, and keeping operations on track. Follow this checklist to make the onboarding process run as smoothly as possible.
- Get the new hire’s ID, work eligibility, and tax withholding forms in order before you do anything else.
Make a copy of the employee’s government-issued photo ID and confirm that the new hire is eligible to work in the United States. This requires filling out an I-9 form and checking with the government database that it’s valid. Neglecting to collect an I-9 at the time of onboarding can result in fines worth $375-$16,000 per violation, with another $100-$1,100 per violation if you fail to produce a valid I-9 for each employee at the time of inspection.
In order to make sure that the employee’s paychecks are calculated correctly from the first payroll period onward, you will need to collect a Form W-4. If your state and/or city has income taxes, you will also need state and local withholding forms. This is particularly important if your organization hires talent from multiple states, such as the greater New York City and Philadelphia areas. This is also the ideal time to get direct deposit forms filled out.
- Order a background check.
Depending on the scope of the work performed, you may be held liable for your employees’ actions and deemed negligent in the hiring process if it turns out that they committed crimes in the past that are relevant to the job (such as larceny if hiring an inventory manager). Note: a nonviolent drug offense is less likely to have bearing on their lives nowadays. You may not need every piece of information that comes up in a background check or find it relevant to the position, but it can help ensure the safety and security of your clients, staff, and other stakeholders.
- Enroll the employee in any benefit programs offered.
Even if there’s a grace period involved, it’s best to get a new hire onboarded into any benefit programs immediately so that neither of you has to be inconvenienced by manual enrollment in the future. Health insurance and retirement benefits are the most crucial benefits for immediate enrollment, but if you offer any other programs like pre-tax transit passes, flex accounts, and wellness plans (e.g. gym memberships), you also need to get the new hire enrolled or leave instructions on how to do so.
- Walk the new hire through your business processes, policies and procedures.
Once all of the relevant government and payroll forms have been filled out and you’re ready to proceed, getting new employees familiar with the business environment and organizational culture is the next integral step of the onboarding process.
If you have an employee handbook, provide them with one. Outline the most critical policies that are most relevant to the job and maintaining an efficient and safe workplace such as code of conduct, dress code, guidelines for remote work and total hours worked, parking rules and other policies and procedures they need to be immediately aware of. If your workplace uses badges or employee IDs, arrange to have one made right away, and if necessary, get business cards with the employee’s name printed on them.
- Arrange the new hire’s workspace.
Does your new hire have a desk and chair, a properly set up computer and any other tools that may be necessary? Or, if the position is not a desk job, do you have the required uniforms in the correct size, along with tools and any other occupational gear your new hire will need? Is the area properly furnished (if you recently expanded your workplace to make room for new hires)?
Other important aspects of readying the workspace that shouldn’t be overlooked include employee IDs (and updating any registries if located within a building or complex), keys, filing cabinets, employee e-mail addresses and intranet, and furnishing devices (if this is your policy).
- Integrate new employees into the workplace.
Arrange for any meetings or lunches with the appropriate managers, clients, or key employees that new hires need to get to know better. Have them tour the workplace to get familiar with how it operates and make arrangements for training or additional resources that may be required. Make sure that the new hires also understand the required job duties and how they fit within the department or overall organization. Encourage questions and comments throughout the entire process.
Onboarding can be a stressful time for smaller organizations that are just starting to grow. But if you follow this checklist and get those critical forms out of the way first, transitioning a new hire can go smoothly.
Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goals at Isler Northwest is to earn our clients trust as their primary business and financial advisors.
Isler Northwest
1300 SW 5th Avenue
Suite 2900
Portland, Oregon 97201
