What should businesses do before hiring their first employee?

Preparing to Hire Your First Employee in Oregon

Before hiring your first employee in Oregon, it is essential to complete several operational steps to ensure compliance and smooth onboarding.

Register Your Business and Obtain Required IDs

• Register your business with the Oregon Secretary of State if not already done.
• Obtain an Employer Identification Number (EIN) from the IRS for tax reporting and payroll purposes.
• Register for Oregon state payroll taxes with the Oregon Department of Revenue and the Oregon Employment Department.

Understand Employment Regulations and Compliance

• Familiarize yourself with Oregon labor laws, including minimum wage, overtime, and mandatory breaks.
• Classify your worker correctly as an employee or independent contractor to avoid misclassification penalties.
• Set up workers’ compensation insurance as Oregon requires coverage for most employers.

Prepare Payroll and Recordkeeping Systems

• Implement a payroll system to handle wage payments, tax withholdings, and reporting.
• Establish recordkeeping procedures for employee information, hours worked, and tax documents as required by Oregon and federal law.

Develop Hiring and Onboarding Processes

• Create job descriptions and employment agreements that comply with Oregon’s employment laws.
• Prepare new hire reporting to the Oregon Employment Department within the required timeframe.
• Set up employee benefits and workplace policies relevant to your business size and industry.

As of 2026, staying current with Oregon's employment regulations and maintaining organized payroll and compliance systems will help your business onboard your first employee effectively and avoid penalties.