Alexandria Ocasio-Cortez’s campaign was fined $1,500 for failing to obtain the required worker’s compensation coverage from March 31, 2018, to April 30, 2018. As Congresswoman Ocasio-Cortez found out, being a new employer is not easy. There are tons of laws to follow, multiple entities that make and enforce the required rules and regulations, and tens of thousands of court cases explaining and refining these laws. Not only is it important to follow employment requirements because you do not want to break the law; ensuring your employees are equipped, prepared; and welcomed on their first (and every) day, has long-term implications for employee retention; satisfaction; and helps to prevent liability in the future. New employers need a hiring checklist.
What New Businesses Must Consider When Hiring New Employees: A Hiring Checklist
Let’s talk about some of the many tasks that new businesses need to do to ensure they do not make a mistake when they hire their first employee. (For the sake of this piece I am going to assume that the company has already created a legal entity, opened a company bank account, applied for an employer identification number, registered with any required state or local agencies, obtained any required business licenses, and is basically at the point of being ready to hire its first employee.)
Here is a hiring checklist that any new business should review when hiring its first employee:
1. Employers need an employee handbook. The employee handbook should outline the various requirements that employees must follow and explain what the company will do for its employees including that the company will follow all the required laws and regulations regarding employment. A handbook tells employees how to request leave, the discipline structure, how to report complaints, what company holidays will be, what benefits employee have, and any pertinent information that all employees need to know. This is the guide that helps employees know what is expected of them.
2. Companies need a plan to motivate employees. A motivated workforce performs better. A lack of employee engagement is responsible for $450-550 billion in lost productivity each year in the U.S. Here are some things to ask yourselves related to employee motivation:
- How will employees grow at the company? If there is no room for employees to grow, then they will not be motivated and will eventually look for a new job. Helping employees grow can help retain your best employees, which improves your business. (This includes things like room for promotions, learning new skills, opportunities to manage or train, utilizing employee strengths, etc.)
- How will you treat them as employees? Employees want and need recognition and feedback. You shouldn’t just talk to an employee when there’s a problem, in fact, you should share with them how you feel about their successes (formally and informally).
3. Make sure that employees fill out all of their required paperwork correctly. Think about the I-9s. Section 1 on the I-9 must be completed on the first day of the employee’s employment. Employers have three days to complete Section 2. You can review what to do here in my earlier post.
New employees also must complete the W-4 form for their tax withholding.
4. Businesses also need to run any necessary background checks, drug tests, motor vehicle reports, and other checks that are required for your particular business or these employees. You should get the employee’s written permission to run drug tests and background checks.
5. Employers also need to set some formal processes that the employees will follow (and great employers also include not only adequate, but exceptional, training). This training/support should detail for employees how they successfully do their jobs. What are the processes for things that require step-by-step actions to perform them correctly? Who do they report to in the event of a problem? Who do they refer people to based on particular needs? What are the communication norms and expectations within the business/department/team? Essentially, how do they do their jobs? You should not expect an employee to be able to exercise their own discretion to do their new job. Just like anything else, learning to do a job takes time.
Think about Chick-Fil-A. They have a very particular way they want their employees communicate with their customers. Rather than saying “you’re welcome” when a customer says, “thank you” every employee is instructed to say “my pleasure.” This is something that is readily identifiable and special about Chick-Fil-A. People remember it. There are also a slew of memes about it. Employees would not do this with the consistency required for this brand recognition without the training and feedback they receive.
6. Employers need a personnel file and a recordkeeping system for the employees. When you hire an employee, you need to ensure that they sign any necessary documents for your company including:
- Noncompetition and nondisclosure agreements
- Employee handbook acknowledgement (stating that the employee received a copy of the handbook)
- Life and health insurance plan information documents
- 401(k) documents
7. Ensure that the workers have a safe place to work and the tools that they need. Nothing makes an employee feel unwelcome more quickly then showing you didn’t put any thought into their arrival, first day, and needs. Do you have enough equipment for the employee on their first day? Is their computer set-up? Is there someone to train them? Have you showed them where to put their lunch? There is nothing worse than feeling like an afterthought on your first day of work because no one was told that you were starting, or nobody cared to figure out how to orient you. It makes you feel a bit like Milton when he gets moved down to the basement in Office Space.
8. And don’t forget to get worker’s compensation coverage for your business. Workplace accidents can get expensive.
Conclusion
Hiring a new employee is incredibly important, which is why all companies should have a hiring checklist. If a company fails to properly prepare for a new employee, then you start with an employee that already feels out of place and unwanted. The company may also set itself up for a lot of liability later on by not adequately ensuring successful orientation and onboarding. Great training, preparation, and navigation of the laws can ensure success for employer and employee alike.
The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.
The information provided is my own and does not reflect the opinion of my firm or anyone else.