Part 6 in an eight-part series on Becoming an Employer.
When you officially hire an employee, you and your new employee must complete forms that are required by law.
Name and Social Security Number
You are required to record the employee’s name and Social Security number for Form W-2 reporting purposes at the end of the year. You may ask the new employee to see their card to verify their Social Security number.
You can also verify the number for free by using the Social Security Administration’s Verification Service. Note: If an employee presents an Individual Taxpayer Identification Number instead of a Social Security number, it may mean they are not eligible for work in the United States. Direct the employee to apply to the Social Security Administration for a number.
Give your employee Form W-4, the Employee’s Withholding Certificate, and the instruction page. This form asks the employee for their Social Security number and basic contact information and includes a worksheet to determine their tax filing status. Enter this information into your payroll system before you run payroll the first time. If your employee has questions about the form, direct them to the IRS website, where they have an easy Withholding Calculator.
Form W-4 must be completed before your employee begins work the first day. You must keep the W-4 on file, and it remains in effect until the employee fills out a new one (Note: if an employee determines that they are tax-exempt, they are required to fill out a new one annually.)
Form I-9 and E-Verify
Within three days of hire, federal law requires employers to verify eligibility of employees to work in the United States. Employees must complete Part 1 of the I-9 and show documents that prove their identity and eligibility to work in the U.S. As the employer, you can only request to see documents specified on the I-9 form, and you cannot require the employee to show a specific document. The employee must be allowed to select which documents to show the employer. Then, complete Section 2, which states that you examined the documents and they appear to be authentic. For more information on this process, refer to the training article “What is a Form I-9?”
Once you complete these steps, you can verify the employees through EVerify, an online system provided by the U.S. Citizenship and Immigration Services (note: currently, Arizona and Mississippi require most employers to use the E-Verify system). For more information, read our article on E-Verify.
New Hire Reporting System
You must report each new hire to your state within 20 days of their hire or rehire. Your state maintains a New Hire Reporting database to ensure child support orders are enforced. Your state may contact you if you need to withhold child support for a particular employee.