The Hiring Process
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Lessons learned from a small business owner on hiring for the first time, as well as hiring and HR nuances for remote employees. Presented at the 2014 Digital Business Summit.
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The Hiring Process
- 1. AUG 20, 2014 The Hiring Process: First Time Hiring & Remote Employees Emily Lewis for Digital Biz Summit Some rights reserved
- 2. Owner, Lead Developer abrightumbrella.com Author, Microformats Made Simple microformatsmadesimple.com Co-author, HTML5 Cookbook shop.oreilly.com/product/0636920016038.do Managing Editor, Web Standards Sherpa webstandardssherpa.com Co-host, CTRL+CLICK CAST ctrlclickcast.com
- 4. I am not a hiring expert.
- 5. Or a human resources expert.
- 6. Seek Expert Help • HR consultant • Accountant • Lawyer • Notary public • Use your professional network
- 7. Why Hire? • 1099 contractor isn’t possible • Business growth • Business investment • Professional collaboration
- 8. State Employment Laws • For remote hires, employer must follow the laws of the state in which the employee lives • Contract or at-will employment • Minimum wage • Workers’ compensation
- 9. Pre-Hiring Preparation • Create job title and description • Annual salary or hourly rate • Part-time or full-time • Create job application • Must specify type of employment • Be aware of what you can and cannot ask • Do not substitute with a resume
- 10. Pre-Hiring Preparation • Gather tax forms • Define internal policies • Identify materials for employee manual
- 11. Required Paperwork • After a job offer is accepted, new hires must complete • Job application • Employee eligibility verification (I9) • Employee withholding allowance (W4) • Conflict of interest statement • Emergency contact form • Summary of consumer rights • Release for background checks
- 12. Required Paperwork • Comply with US and state labor and tax laws • Protects the employer’s business interests • Protects the employee’s rights
- 13. Nice-to-Have Paperwork • Confidentiality agreement • Internet policy • Telephone and email policy • Travel policy, including per diems and reimbursements • Company-specific policies, such as work ownership and release of information to media
- 14. I9 Verification • Federal form that verifies an employee’s eligibility to work in the US • Section one completed on or before the first day of work (the start date) • Section two must be completed within three days of the employee's start date
- 15. I9 Verification • Verification requires in-person, physical examination of original documents • Verification by employer or an authorized representative • Presents a challenge for remote hires
- 16. I9 Verification - Remote Hires • Notary public qualifies as an authorized representative • Verification is not a notarization; no notary seal • Notary title with signature should be “Authorized Representative” • Employer must maintain original document
- 17. Document Storage Laws • Personnel file documents must be stored separately from all other new hire or employment documents • Personnel file documents are any containing protected personal information (PPI) • SSN • Date of birth • Credit card numbers • Home address • Home phone
- 18. Document Storage Laws • Most documents can be stored electronically, provided the storage solution is • Reliable • Secure • Accurate • Accessible (can be reproduced in hard copy)
- 19. Document Storage Laws • I9 is the exception; cannot be stored electronically • Recommended to store separately from everything else • Any hard-copy documents must be maintained in locked storage
- 20. Document Retention • Different employment documents must be retained after termination for varying periods of time • When the retention period has passed, the documents must be destroyed
- 21. Document Retention • Original job description and job application for one year from the date of termination • Payroll records for three years from the date of termination • Employment documents with protected information for three years from the date of termination • Tax records for four years from the date tax is due or paid • Just the tip of the iceberg
- 22. Payroll • My accounting firm handles all payroll. I provided initial details: • Pay frequency (e.g. weekly, bi-monthly, monthly) • Hourly rate • Check or direct deposit • Estimate of quarterly gross payroll • Whether I would be paying payroll taxes online • The state my employee resides in
- 23. Economic Nexus • Washington state has an economic nexus with businesses in certain classifications • Having an employee living and working in Washington qualifies as an economic nexus • This means additional business licensing and more taxes • Every state is different
- 24. Economic Nexus • Registered my business as a Foreign LLC with Washington’s Department of Revenue • Certificate of Good Standing • Applied for a business license in Washington • Once processed, company operates like any other employer in Washington
- 25. State Reporting • Within 20 days of a hire, must report new hires to Washington’s Social and Health Services Department • Accounts for online reporting and tax payments • Employment Security Department • Department of Labor & Industries • Washington Department of Revenue
- 26. State Taxes • Employment taxes are only paid to the state where employee resides • Every state is different • State unemployment tax (SUTA) • Workers’ compensation insurance
- 27. State Taxes • Depending on the state’s economic nexus rules, there may be non-employment taxes due • Business and occupation taxes on apportionable income • Use tax for goods and services used in Washington • Even if no tax is due, filing is required
- 28. Federal Taxes • FICA (form 941) - employer's portion of social security and Medicare tax withholding • Employees also pay this tax • Due quarterly • FUTA (form 940) - federal unemployment tax based on payroll • No employee contribution • Quarterly or annually depending on tax liability
- 29. Federal Taxes • EFTPS account for online payments • Filing not available online; hard-copy, snail mail • For both state and federal, my accounting firm prepares the reports and gives me a checklist for payments
- 30. Hiring Is a Serious Business Decision • More taxes • More fees • More stress • More responsibility
- 31. But for the right employee...
- 32. Totally Worth It • More focused, efficient workflows • More and better internal documentation • More strategic about clients, projects and opportunities • More strategic about engagement • New identity • Complete brand system • Intern • Bigger projects • All without a single interruption to our clients
- 33. Hiring a Remote Employee abrightumbrella.com/hiring • Part 1: Human Resources & New Hire Process • Part 2: Eligibility Verification & Document Retention • Part 3: Payroll & State Business Registration • Part 4: Employment-Related Taxes