How to Hire Legally: Your Ultimate Guide

Hi there, dreamers & dynamos,

Welcome to Hiring 101.

How to Hire Legally for Entrepreneurs and Online Businesses: Your Ultimate Guide

You know that you need to hire, but you're wondering: "How to hire legally," so that I keep my biz safe? 

I see you. You just started your own online biz, and it's going great (high five, ace!). You're wearin' all the hats, but it's cool—you got this! Right? Until, well, boom Workloads pile up like big ol' pancakes (but waayyyy less tasty) and you realize it's time to recruit a new teammate to share the glory.

So, you've decided it's time to expand your one-person wonder into a team, huh? Challenging, yes. But hey, you're an entrepreneur. You eat challenges for breakfast, right? Remember this - building your squad is like hiring your Avengers. Get it right, and you'll take over the world. Get it wrong... well, you've seen the movie, right?

But hey, now comes the real question:

How do you hire legally without scarin' yourself half to death over legal issues? 

Roll up your sleeves, friends, 'cause I'm about to help you kick legal worries to the curb and start building your dream team.

1. Lay Down Your Biz Foundations

First thing's first: You wanna make sure you've got solid legal foundations in place before starting the hiring process. And no, I ain't talkin' about sippin' espresso with attorneys in fancy suits (although, feel free to invite me if that happens).

Register your business entity:

Make it official, buddy! Register your business as an LLC, Sole Proprietorship, or Corporation. Each one’s got its own pros and cons, so do your homework, kid! It’s what all the cool kids do, for real. Check out my articles here and here to help you figure it out!

EIN Number:

Your Employee Identification Number (EIN), is the business equivalent of a social security number. It might seem like just a string of numbers, but hey, every superhero needs an ID. Get yours from the IRS website, you can't hire legally without one.

State's Labor Department:

Register with your state's Labor Department. Trust me, it's not a sexy move but it needs to be done.

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Business Insurance:

When it comes to work-safe policies, you gotta put yourself in the shoes of an overprotective parent. Baby-proof your biz with worker's compensation and liability insurance. Keep in mind that requirements vary from state to state (yep, geography matters!), so double-check which ones apply to you.

Bank account and finances:

Let’s talk about money, baby! Setting up separate bank accounts for your business is like spring cleaning your finances, so your accountant will definitely fist-bump you for this move. You're going to want everything to be nice & tidy before you think about adding someone to your payroll. Don't forget to track your expenses, too. (Psst: accounting software and apps are game-changers!)

2. Find Your New Partner in Crime

Now that your legal foundations are secure, let's make some hiring magic happen.

Ask yourself:

• What’s the most helpful position right now?

• Can someone keep up with my witty one-liners and crackers? (Okay, that's optional)

• How can they realistically and authentically cover for me?

• What work do I want/need to focus on?

Don't be that guy who recruits a Jedi to perform a pirate's job. Write a clear job description and stay laser-focused on what you need instead of what you think will make your business all shiny and cool.

3. The Holy Grail for how to hire legally: Employee Agreement or Contract

Bam! You’ve found 'em and they are missing puzzle piece level of fit. But don't go poppin' the champagne just yet—a legally binding contract is as essential as the caffeine that fuels your every mornin'. Trust me on this one, friend.

Make sure to include these things in your employee contact, at the very least:

• Basic job description and functions: Spell it out loud and clear so they know what they're signing up for.

• PTO policy and other benefits: What about vacay-mode and other goodies? Everyone loves a little R&R, so make sure your company policies are clear-as-day.

• Schedule and employment period: Full-time? Part-time? Seasonal? Be specific!

• Relationship Status: Nope, this isn't online dating but you need to spell out if this an employee or an independent contractor. Get it right, because there are mega tax consequences. Check out this article for help getting clear.

• Confidentiality, privacy, and responsibilities: You don't want your trade secrets spillin' all over the grapevine, right? Talk about boundaries, expectations, and yeah, the no-no's.

• Termination procedures: We all hope it never happens, but it's better to be prepared—like a Boy Scout with a Swiss Army knife.

• Standard Legal Clauses

4. Get Your Employee Handbook On

No, I'm not talking about a dusty, boring manual that will rot on a shelf somewhere. I'm talking about a handy-dandy guide to employee life at your company, with an acknowledgment provision (meaning they’ve got to sign to seal the deal). Go on, unleash your creative side!

Your handbook should include all those spicy policies, procedures, and expectations that make your company the rockstar it is. From dress code to social media, serve up that essential info with a side of style.

5. Send the Offer Letter, My Friend!

Ya know when you slide that heartfelt note into your crush's locker? Well, this is kinda the same. Woo your future employee with an offer letter that spells out salary, benefits, work hours, and any other deets that'll make 'em smile. This is not a legally binding document but it is a formal offer of employment. Often, companies will make an offer letter contingent on the employee passing a background check. Go on, Romeo. Seal the deal!

6. Tax Forms & Legal Bits 📂

Legally speaking, Uncle Sam needs a chunk of your hiring pie. So don't forget your new recruit’s gotta complete state and federal tax forms, like the W-4, I-9, and state-specific equivalent, before starting. (Sorry, friend. It ain't a party without paperwork.) 

7. Payroll Dreams Do Come True

Finally, hu$tle-mode activated! Payroll software is your new BFF, pal. Brands like Gusto, QuickBooks, and ADP are your go-to partners for paychecks, taxes, and benefits, and they're all designed to keep you worry-free.

Once set, you've gotta report your new hire to your state's new hire reporting agency. Yeah, they like to keep tabs on your victories too.

8. Last But Not Least: IRS Form 940 and Personnel Files

Stay with me, folks—we're almost at the finish line. File your IRS Form 940 to report you Annual Federal Unemployment Tax, set up your personnel files to keep things organized and well-documented, and voila! You're living the CEO dream!

And, just like that, you’re a pro at how to hire legally.

Buckle up, entrepreneur. You’re about to go on a hiring crusade that'll lead you to a swoon-worthy lineup, bulletproof legal prep, and all the sweet success your heart desires.

Just remember, you're not just assembling a team, you're creating a legacy. So go on, make your mark. Now get out there, and may your squad be ever-populated with dream-makers, doers, and confident hiring-masters. Cheers to your epic journey!

THIS ARTICLE IS NOT A SUBSTITUTE FOR LEGAL ADVICE AND IS OFFERED FOR INFORMATIONAL PURPOSES ONLY. EVERY SITUATION IS UNIQUE AND YOU SHOULD CONSULT A LOCAL ATTORNEY FOR ADVICE ON YOUR PARTICULAR CIRCUMSTANCES.