What should businesses do before hiring their first employee?

Steps for Washington Businesses Before Hiring Their First Employee

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

Register Your Business

• Register with the Washington State Department of Revenue: Obtain a Unified Business Identifier (UBI) number and register for state taxes.
• Register with the Washington Employment Security Department (ESD): This allows you to report and pay unemployment insurance taxes.

Obtain Required Tax Accounts

• Federal Employer Identification Number (EIN): Apply through the IRS for payroll and tax reporting purposes.
• Washington State Payroll Taxes: Register for workers’ compensation insurance and state withholding tax accounts.

Understand Employee Classification

• Classify workers correctly: Determine whether the worker is an employee or an independent contractor to avoid misclassification penalties.

Set Up Payroll and Recordkeeping Systems

• Implement payroll processing: Choose a payroll system or service that complies with Washington’s wage and hour laws.
• Maintain accurate records: Keep records of hours worked, wages paid, and employment documents as required by state and federal law.

Prepare for Compliance and Reporting

• Understand wage and hour regulations: Familiarize yourself with Washington’s minimum wage, overtime, and paid sick leave laws.
• Post required workplace notices: Display state and federal labor law posters in the workplace.

Secure Required Insurance

• Workers’ compensation insurance: Obtain coverage through the Washington State Department of Labor & Industries before the first day of work.
• Consider additional insurance: Evaluate general liability or unemployment insurance needs based on your business type.

As of 2026, following these operational steps will help Washington businesses hire employees compliantly and efficiently, reducing risks and ensuring smooth workforce integration.