What should businesses do before hiring their first employee?

Steps North Dakota Businesses Should Take Before Hiring Their First Employee

Before hiring your first employee in North Dakota, it is essential to complete several operational tasks to ensure compliance and smooth business operations.

Register Your Business for Employment

• Obtain an Employer Identification Number (EIN): Secure an EIN from the IRS to use for tax reporting and payroll purposes.
• Register with the North Dakota Workforce Safety & Insurance (WSI): This is mandatory for workers' compensation coverage.
• Register for State Unemployment Insurance (SUI): Set up an account with the North Dakota Job Service for unemployment tax reporting.

Understand Payroll and Tax Obligations

• Set up payroll systems: Implement payroll software or services to handle wage payments, tax withholdings, and reporting.
• Comply with payroll tax requirements: Withhold federal and state income taxes, Social Security, Medicare, and unemployment taxes.

Prepare for Hiring and Compliance

• Classify employees correctly: Determine whether workers are employees or independent contractors to meet IRS and state guidelines.
• Establish recordkeeping processes: Maintain employee records including tax forms, employment eligibility verification (I-9), and wage information.
• Understand North Dakota labor laws: Familiarize yourself with wage and hour rules, workplace safety, and anti-discrimination regulations.

Set Up Employee Benefits and Insurance

• Consider mandatory insurance: Workers' compensation insurance is required through WSI.
• Plan for employee benefits: Evaluate options for health insurance, retirement plans, and other benefits to attract and retain employees.

As of 2026, regularly review North Dakota's employment regulations and tax requirements to maintain compliance as your business grows.