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
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
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
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
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
I9 Verification • Verification requires in-person, physical examination of original documents • Verification by employer or an authorized representative • Presents a challenge for remote hires
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
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
Document Storage Laws • Most documents can be stored electronically, provided the storage solution is • Reliable • Secure • Accurate • Accessible (can be reproduced in hard copy)
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
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
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
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
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
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
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
State Taxes • Employment taxes are only paid to the state where employee resides • Every state is different • State unemployment tax (SUTA) • Workers’ compensation insurance
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
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
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
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
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
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