The Hiring Process

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.

Transcript

1. Some rights reserved The Hiring Process: First Time Hiring & Remote Employees Emily Lewis for Digital Biz Summit AUG 20, 2014
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
3. abrightumbrella.com/hiring
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 • Part 1: Human Resources & New Hire Process • Part 2: Eligibility Verification & Document Retention • Part 3: Payroll & State Business Registration • Part 4: Employment-Related Taxes abrightumbrella.com/hiring
34. Questions? emily@abrightumbrella.com @emilylewis