Essential Legal Documents for Hiring Your Workforce
What are the essential documents for hiring employees:
Pre-hiring documents
Hiring documents
Employee documents
Pre-hiring documents:
Requiring candidates to submit an Employment Application, in addition to a resume, can help when it comes time to evaluate and compare applicants. Employers, however, may want to consider carefully reviewing their Employment Applications to avoid asking questions that may offend or violate the law, including those about family status, sexual orientation, or religion.
Hiring documents:
Sending a clear and understandable Employment Offer Letter can help you and your future employee get off to a good start. In your Offer Letter, you may want to discuss the terms and conditions of your job offer to make sure they understand what you are offering, including hire date, salary, benefits, and more.
An Employment Contract describes the terms and conditions of employment. This typically includes the hire date, salary, benefits, bonuses, additional agreements, and ability to end employment. Before asking your new hire to sign an employment contract, it can be helpful to have a Legal Pro review the agreement to make sure it complies with your state and local legal requirements, and that you are legally protected if the employee suddenly quits or does not work out.
Requiring new hires to pass background and reference checks are standard parts of the hiring process. When extending an offer, or before doing so, you may want to request a Consent to Background and Reference Check. Signed consent, or even providing copies of reports you receive, may be legally required in your state.
Depending on your industry and the employee, a Noncompete Agreement can help protect your business when an employee leaves your organization.
Before an employee's first day, there are a few more legal requirements for employees. An essential form for onboarding new employees is IRS Form W-4. This tax form tells employers about an employee's tax filing status, amounts of credits and deductions, and any other data related to tax withholding. It is critical to make sure that you are withholding taxes based on the employees' guidance shown in Form W-4.
Additionally, filling out a Form I-9 to verify an employee's eligibility to work is a legal requirement that cannot be ignored. Failing to do so can result in penalties and fines.
Lastly, after hiring an employee, handing them an Employee Handbook that covers employment expectations, responsibilities, benefits, vacation, and other rules can help new workers learn about your specific policies and the do's and don'ts.
What are the essential legal documents for hiring contractors?
When it comes to hiring, independent contractors are not treated like employees, although both may perform tasks and services for your organization. When you hire an independent contractor, you typically do not control how or when they work. Also, unlike employees, contractors are not kept on the company's payroll, and federal, state, and employment taxes are not withheld form their pay.
You may want to make sure that you have the right legal documents in place when hiring contractors. While you can use some legal documents for both employees and contractors, such as a Job Posting Template or a Consent to Background Check, some documents are only for contractors. Here are some key documents to consider adding to your hiring processes for independent contractors.
Independent Contractor Agreement
IRS Form 1099-NEC
Notice of Contract Termination
What legal documents are required before an employee or contractor can legally start working?
Before an employee can legally start working, employers must complete Form I-9, which is required by the Immigration Reform and Control Act (IRCA) of 1986. Form I-9 confirms an employee's identity and whether they can legally work in the United States. Employers are required to have these forms completed and stored properly.
The employee must show that they can work in the United States by providing certain records proving their identity and legal status, such as passports, work authorizations, driver's licenses, Native American identification cards, military identification cards, and Social Security cards. Because independent contractors are not employees, they do not require a completed Form I-9, unless they are working on a federal contract subject to special rules.
Employers may be able to save time by signing up for E-Verify, a government operated online system. E-Verify allows employers to electronically verify employees and their ability to work in the United States.
What happens if I let an employee start working before confirming they can legally work in the U.S.?
If you hire an employee who cannot legally work in the United States, you may face penalties and fines under the Immigration and Nationality Act ranging from $250 to $3,200 per ineligible employee. Also, if you make a habit of hiring employees who cannot legally work, you may face criminal charges.
This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client.
For further information please contact me at www.kmckernanlaw.com kevin@kmckernan.com or 718-317-5007.