What should businesses do before hiring their first employee?

Preparing to Hire Your First Employee in Pennsylvania

Before hiring your first employee in Pennsylvania, there are several operational steps to complete to ensure compliance and smooth onboarding.

Business Registration and Employer Identification

• Register Your Business: Confirm your business is properly registered with the Pennsylvania Department of State.
• Obtain an EIN: Apply for an Employer Identification Number (EIN) from the IRS for tax reporting and payroll purposes.

Understand Pennsylvania Employment Regulations

• Employee Classification: Determine whether workers are employees or independent contractors to comply with payroll and tax obligations.
• Wage and Hour Laws: Familiarize yourself with Pennsylvania’s minimum wage, overtime, and work hour regulations.
• Workers’ Compensation Insurance: Secure workers’ compensation coverage as required for Pennsylvania employers.

Set Up Payroll and Tax Reporting

• Register for State Employer Accounts: Set up accounts with the Pennsylvania Department of Revenue and Department of Labor & Industry for withholding and unemployment insurance taxes.
• Implement Payroll Systems: Choose payroll software or services that handle tax withholdings, reporting, and employee recordkeeping.

Prepare Hiring Documentation and Policies

• Develop Job Descriptions: Clearly outline roles and responsibilities.
• Create Employee Handbook: Include workplace policies, attendance, benefits, and compliance information.
• Complete New Hire Reporting: Report new hires to the Pennsylvania New Hire Reporting Program within 20 days of employment.

Verify Eligibility and Maintain Records

• I-9 Employment Eligibility Verification: Complete Form I-9 to verify the employee’s eligibility to work in the U.S.
• Maintain Accurate Records: Keep payroll, tax, and employment records as required by federal and Pennsylvania law.

Following these steps will help your Pennsylvania business stay compliant and operationally ready when hiring your first employee.