What should businesses do before hiring their first employee?

Preparing to Hire Your First Employee in Delaware

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

Register Your Business and Obtain Employer Identification

• Business Registration: Confirm your business is properly registered with the Delaware Division of Corporations.
• Employer Identification Number (EIN): Obtain an EIN from the IRS to handle payroll taxes and reporting.

Understand Delaware Employment Laws and Compliance

• Employee Classification: Determine whether your worker is an employee or an independent contractor to apply correct tax and labor rules.
• Wage and Hour Laws: Review Delaware’s minimum wage and overtime requirements to set compliant pay rates.
• Workers' Compensation Insurance: Secure required workers’ compensation coverage before employees start work.

Set Up Payroll and Tax Reporting Systems

• Payroll System: Implement a payroll system to manage employee wages, tax withholdings, and benefits accurately.
• State Tax Registration: Register with the Delaware Division of Revenue for state withholding tax and unemployment insurance tax accounts.
• Recordkeeping: Maintain employee records including tax forms, hours worked, and wage payments according to Delaware and federal requirements.

Prepare for Hiring and Onboarding

• Job Descriptions: Create clear job descriptions to guide recruitment and compliance with employment laws.
• New Hire Reporting: Report all new hires to the Delaware New Hire Reporting Program within 20 days of hire.
• Employee Documentation: Collect Form I-9 for employment eligibility verification and W-4 for tax withholding.

Following these steps will help your Delaware business establish a compliant and efficient hiring process for your first employee.