The first employee is a significant milestone at the start of every new business. There is a lot of paperwork and formal procedures to pave the way for hiring additional workers. Hiring the first employee usually includes these five steps.

Obtain an Employer Identification Number

An employer identification number (EIN) is necessary to report the employee’s existence to the IRS. Also known as a taxpayer identification number (TIN), this nine-digit number identifies the employee when reporting taxes. On some forms, it can be used in place of a Social Security number.

Create a Payroll

A payroll system must be created before placing the employee on it. An accountant is hired, or accounting software is used to handle the payroll. When tax season arrives, the accountant’s services may be needed again to handle payroll taxes.

Register With the State’s Labor Department

Paying taxes is one of the first necessary steps when hiring employees. In case an employee becomes unemployed, the employer needs to pay state unemployment compensation taxes. These funds are given to workers who are terminated unexpectedly as they look for new work.

Obtain Workers’ Compensation Insurance

Workers’ compensation insurance protects workers who are injured in workplace accidents. They are guaranteed paychecks when they become temporarily or permanently disabled and unable to work. The compensation is mainly used to pay for medical bills and lost wages. Obtaining this type of insurance is required in many states.

Schedule Orientation and Training

Often an overlooked step but necessary step is to keep workers fast and highly productive. They need to know exactly how to perform their jobs and do it with minimal supervision. Orientation is necessary to teach them more about the business, values, and expectations for each worker. Then, training is scheduled to teach the policies and procedures that should be followed at work at all times.

The first employee paves the way for dozens or hundreds of others to follow. There are many procedures to complete to make the business legitimate, and it isn’t easy to keep track of each one. To remain serious about doing business with reliable people, every employer must follow the correct protocols when hiring one or more employees.