Help Wanted:Hiring Your 1st EmployeeHiring, taxes, payroll, legal compliance & recordkeeping

Presented by:

Bronwen Madden, Coordinator, SBTDC hosted by MSU-WP

Deanna McNew, Area Manager, Penmac Staffing

Thursday, October 23, 2014 - 1:30 PM to 4:30 PM (CDT)

Housekeeping• Mobile devices

• Restrooms

• Break

• Respect

• Interactive process

SponsorsPenmac Staffinghttp://www.penmac.com

Ozarks Small Business Incubator (OzSBI)http://ozsbi.com

Small Business & Technology Development Center (SBTDC) Hosted by Missouri State University – West Plains (MSU-WP)http://wp.missouristate.edu/ucp/SmallBusiness.htm

U.S. Small Business Administration (SBA)http://www.sba.gov

Introductions• Participants

• Name

• Company

• Position

• Desired Outcome

• Presenters• Bronwen Madden, Coordinator, SBTDC hosted by MSU-WP

• Deanna McNew, Area Manager, Penmac Staffing

Seminar Outline• Registration Form

• Seminar Agenda• Hiring

• Taxes, Payroll, and Legal compliance

• Q & A

• Resources

• Handouts

• Evaluation

Part 1: Hiring

Who Are You Hiring? • Employees

• Independent contractors

• Statutory employees

• Non-statutory employees

http://missouribusiness.net/article/doing-business-in-missouri-hiring-employees/#tips

Contractor Vs. Employee

http://www.sba.gov/content/hire-contractor-or-employee

An Independent Contractor An Employee

Operates under a business name Performs duties dictated or controlled by others

Has his/her own employees Is given training for work to be done

Maintains a separate business checking account Works for only one employer

Advertises his/her business' services

Invoices for work completed

Has more than one client

Has own tools and sets own hours

Keeps business records

Ten Tips to Hiring Effectively 1. Define the Job: duties, responsibilities, skillsets, and outcomes

2. Plan Your Employee Recruiting Strategy

3. Use a Checklist for Hiring New Employees

4. Recruit the Right Candidates When Hiring an Employee

5. Review Credentials and Applications Carefully

6. Prescreen Your Candidates

7. Ask the Right Job Interview Questions

8. Check Backgrounds and References

9. Consider Candidates that Complement your Team’s Existing Strengths

10. Use Effective Employment Letters

Expanding the Employee Pool• Advertise in a variety of media (web, print, radio, job fairs, college recruitment, etc.)

• Register with the Missouri Career Center http://jobs.mo.gov to find matches

• Connect with professional and academic associations for potential candidatesExample: Many industry associations will have private job board for members only

• Request names of potential candidates from within local education institutions Example: Recruit from the Honors College or school’s Student Success Center

• Include statements on your business’ commitment to diversity and provide diversity training to current employees Example: Missouri State University is an Equal Opportunity/Affirmative Action/Minority/Female/Veterans/Disability Employer and Institution.

• Work with staffing agencies and consider employees who have held part-time positions

• Establish an employee referral program

The Interview Process• The Invitation: Provide information on the interview location, who will be involved, and

your process; use caution if leaving a message to not jeopardize current employment and maintain confidentiality

• Prepare: Develop a standard set of interview questions to be asked of all applicants; focus questions on required qualifications

• During the Interview: Ask about abilities, not disabilities• Introduce everyone to the applicant and offer water• Keep your poker-face and speak in a normal tone• Look directly at the applicant and try to be at eye-level; be aware of cultural bias• If the applicant misunderstands a question, ask the question in a different way • Close the interview by thanking the applicant and describe your process and timeline

• Afterwards: Notify applicants of the outcome, even those who are not offered the job

Interview Questions

DO ASK ABOUT: DO NOT ASK ABOUT:

Tell me about yourself Race

Describe a time when something went wrong at workand how you dealt with it.

Color

Sex

How would your boss describe you? Religion

What role do you usually play in a team? National origin

Where do you see yourself in five years? Birthplace

Tell me about a favorite project you worked on andwhy it’s your favorite.

Age

Disability

Do you have any questions for me? Marital/family status

http://www.eeoc.gov/laws/types

Reference Checks• Always check references (more than one), especially from former supervisors• Advise the applicant as a courtesy • Develop a set of reference questions and use for each candidate• Identify yourself and your reason for calling• Ask job-related questions• Find out what kind of work relationship the reference had with the applicant (first hand

observation of performance is most valuable)• Refrain from asking illegal questions (same as from the interview)• Can ask about attendance, but not ask about use of sick leave, medical leave, or worker’s

compensation• Live Scan Fingerprint Screening from the Department of Justice (more common for in-

home supportive care businesses, education institutions and youth organizations)

Screening & Evaluating Applicants• Communicate to the Search Committee what qualifications are deemed most important

• Prioritize qualifications to assist in decision-making

• Decide what qualifications can be evaluated from the application materials

• Narrow your pool of applicants to those best qualified: • Brief phone interviews• Pre-interview reference checks• Supplemental application• Work sample request

• Resolve differences of opinion regarding a candidate’s qualifications through discussion

• Retain all applications and screening documentation until the process is completed

• Notify applicants who are no longer under consideration

• Consider applicants that have the National Career Readiness Certificate (WorkKeys)

Workforce Training Assistance• On-the-Job Training (OJT)

Training provided at a worksite by an employer; trainee is an employee of the participating business and trainees receive wages and/or benefits while learning a new skill.

• Work Ready Missouri ProgramIndividuals receiving Unemployment Insurance(UI) Compensation receive occupational worksite training on a part-time basis for up to six weeks.

Local Contact:Steve McCann, Business ServicesMissouri Career Center – West Plains, MOPhone: (417) 256-3158Cell: (417) 293-8653Email: smccann@scwib.org

Break: Back in 15 Minutes

Part 2: Taxes, Payroll and Legal Compliance

Hiring Steps OverviewStep 1. Obtain an Employer Identification Number (EIN)Step 2. Set up Records for Withholding TaxesStep 3. Employee Eligibility VerificationStep 4. Register with Your State's New Hire ReportingStep 5. Obtain Workers' Compensation InsuranceStep 6. Post Required NoticesStep 7. File Your TaxesStep 8. Get Organized and Keep Informed

Step 1. Obtain an Employer Identification Number (EIN)

• Before hiring your first employee, you need to get an employment identification number (EIN) from the U.S. Internal Revenue Service

• The EIN is often referred to as an Employer Tax ID or as Form SS-4• The EIN is necessary for reporting taxes and other documents to the IRS• The EIN is necessary when reporting information about your employees to state

agencies• Apply for EIN online or contact the IRS at 1-800-829-4933

Step 2. Set up Records for Withholding Taxes

• Keep records of employment taxes for at least four years• Send Copy A of W-2 form to the Social Security Administration by the last day of February

to report wages and taxes of your employees for the previous calendar year• Send copies of W-2 forms to your employees by Jan. 31 of the year following the reporting

period• Types of withholding taxes you need for your business:

• Federal Income Tax Withholding• Federal Wage and Tax Statement• State Taxes

Obtain a Missouri Withholding Number from the Department of Revenue.• Obtain Missouri Unemployment Tax from the Department of Labor and Industrial Relations.• If you already have a Missouri Tax Identification (ID) Number, you can add withholding tax to

your existing number by contacting the Department of Revenue

Tax FormsFederal

Internal Revenue Service Forms: http://www.irs.gov/Forms-&-PubsForm SS-4 IRS Employment Identification NumberForm W-4 Federal Employment Tax Withholding Form I-9 Federal Employment Eligibility Verification

StateMissouri Department of Revenue Forms: http://dor.mo.gov/forms

Form W-4 Employee’s Withholding Allowance Certificate Form 2643 Missouri Withholding NumberForm 2699 Unemployment Tax Registration

Step 3. Employee Eligibility VerificationVerify an employee's eligibility to work in the United States

• Complete Form I-9, federal employment eligibility verification

• Employers are required to keep the I-9 on file for three years after the date of hire or one year after the date of the employee's termination, whichever is later

• Employers can use information taken from the Form I-9 to electronically verify the employment eligibility of newly hired employees by registering with E-Verify (http://www.uscis.gov/e-verify)

Step 4. Register with Your State's New Hire Reporting

• Report newly hired and re-hired employees to a state directory within 20 days of their hire or rehire date

• Missouri Department of Social Services: http://dss.mo.gov/cse/newhire.htm

You may use one of the following reporting methods:

1. Mail the W-4 or equivalent form to:Missouri Department of Revenue, PO Box 3340, Jefferson City, MO 65105-3340

2. Fax copies of the W-4 or equivalent form to: (573) 526-80793. Electronically report employees via Secure File Transfer. If you are interested in reporting

employees via Secure File Transfer, please contact Child Support at 1-888-663-6751

Upon First Payroll, Employers Must:

• Withhold state income tax and federal income tax at a percentage determined by salary and exemption information stated on the form W-4

• Withhold 6.2% of the employee's salary for Social Security taxes

• Withhold 1.45% of the employee's salary for Medicare taxes

• Pay the Social Security and Medicare taxes to an approved banking institution on the 15th of the month

• File required payroll reports with the Department of Revenue and the Department of Labor and Industrial Relations on a quarterly and annual basis; and issue W-2 reports to employees at the end of the year

Step 5. Obtain Workers' Compensation Insurance

Carry workers' compensation insurance coverage through a commercial carrier, on a self-insured basis or through their state’s Workers' Compensation Insurance program.

Ryan McKenna, Director, Labor and Industrial Relations CommissionJohn J. Hickey, Director, Workers’ Compensation3315 W. Truman Boulevard, Room 131, P.O. Box 58Jefferson City, MO 65102(573) 751-4231 | Fax: (573) 751-2013workerscomp@labor.mo.govhttp://labor.mo.gov/contact-labor

Missouri Workers' Comp. Ins. Requirements

• Required to carry workers’ compensation insurance if you have five or more employees, unless you are in the construction industry, then you must carry workers’ compensation insurance if you have one or more employees

• Employers that don’t have the required number of employees or who have employees in the exempt categories may “elect” to come under the law and carry workers’ compensation insurance

• Exempt employers that decide not to purchase workers compensation insurance or to self-insure remain exposed to civil lawsuits brought by employees who are injured during work

• Sole proprietors and partners are not themselves covered unless they elect to be covered; close family member-employees and members of a limited liability company are presumed to be covered unless they opt out

http://labor.mo.gov/DWC/Employers

Step 6. Post Required NoticesDisplay posters in the workplace that inform employees of their rights and employer responsibilities under labor lawshttp://labor.mo.gov/content/mandatory-posters

Posters Required by the State of Missouri1. Notice to Workers Concerning Unemployment

Benefits (MODES-B-2)2. Workers' Compensation Law (WC-106)3. Discrimination in Employment (MCHR-9)4. Missouri Minimum Wage Law (LS-52)5. Employer's Employing Workers Under the Age of 16

List (LS-43)6. Discrimination in Housing (MCHR-6)7. Discrimination in Public Accommodations (MCHR-7)

Posters Required by the Federal Government1. Employee Polygraph Protection Act (WHD 1462)2. Employee Rights under NLRA3. Equal Employment Opportunity is the Law (EEOC-P/E-1)4. Fair Labor Standards Act: Minimum Wage (WHD 1088)5. Family and Medical Leave Act (WHD 1420)6. Job Safety and Health: It's the Law Poster (OSHA 3165-

12-06R)7. Uniformed Services Employment and Reemployment

Rights Act

Step 7. File Your TaxesIf applicable, file IRS Form 941, Employer's Quarterly Federal Tax Return

New and existing employers should consult the IRS Employer's Tax Guide to understand all their federal tax filing requirements.• Online: http://www.irs.gov/publications/p15• PDF: http://www.irs.gov/pub/irs-pdf/p15.pdf

Step 8. Get Organized and Keep InformedMaintain a healthy and fair workplaceProvide benefitsKeep employees informed of company policiesSet up recordkeeping

Tax Recordkeeping GuidanceLabor Recordkeeping RequirementsOccupational Safety and Health Act ComplianceEmployment Law Guide (employee benefits chapter)Apply Standards that Protect Employee Rights

Comply with standards for employee rightsEqual Employment Opportunity CommissionFair Labor Standards Act

Follow statutes and regulations for minimum wage, overtime, and child laborhttp://www.dol.gov/compliance/guide

Keep Record of Employee Details• Name and Social Security number

• Dates a worker was hired and separated

• Dates on which a worker performed some services

• The location where services were performed

• The amount of remuneration paid each worker

• The hours of each day in each pay period an individual worked in non-covered employment, and nature of the work

• Wages, including commissions, bonuses, prizes and gifts. Also, tips received by a worker from persons other than employer, if such tips are reported to the employer for Social Security purposes

• Copies of all hiring documents and tax forms (W-4s, I-9, etc.)

Occupational Safety & Health Administration (OSHA)• Employers must furnish a place of employment free from recognized hazards and comply with

occupational safety and health standards

• Right to file a complaint with OSHA and request an inspection

• Employers or Employee Rep given an opportunity to accompany an OSHA inspector

• Employees must not be discharged or discriminated against for filing safety and health complaints

• Citation alleging violations may be issued to the employer; citations specify a time period within which the alleged violation must be corrected

• OSHA citations must be prominently displayed at or near the place of alleged violation for three days or until it is corrected, whichever is later, to warn employees of these dangers

• Free assistance in identifying and correcting hazards and in improving safety and health management is available to employers, without citation or penalty, through OSHA-approved Missouri Department of Labor on-site inspections: labor.mo.gov/DLS/WorkplaceSafety/free_onsite_sharp.asp

• Consult the OSHA Small Business Handbook: osha.gov/Publications/smallbusiness/small-business.html

Occupational Safety & Health Administration (OSHA) Contacts

Kansas City Area Office St. Louis Area Office2300 Main Street, Suite 168 1222 Spruce Street, Room 9.104Kansas City, Missouri 64108 St. Louis, Missouri 63103(816) 483-9531 (314) 425-4249

(314) 425-4255 Voice Mail(816) 483-9724 Fax (314) 425-4289 FaxToll Free:1-800-892-2674 Toll Free: 1-800-392-7743

The Affordable Care Act• Notify employees of the Affordable Care Act

• Businesses with over 50 full-time employees (FTEs) are required to offer health insurance

• Small Business Health Options Program (SHOP) is available for employers with 50 or less FTEs https://www.healthcare.gov/small-businesses/employers

• May qualify for the small business health care tax credit with less than 25 FTEs

• Insurance providers cannot turn you down due to health status or pre-existing conditions

• Open enrollment for 2015 starts on November 15

QUESTIONS? Call 1-800-706-7893 (TTY: 711) Monday-Friday 9 a.m. – 7 p.m. ET

Questions & Answers

Hiring ResourcesU.S. Department of the Treasury, Internal Revenue Service (Circular E), Employer's Tax Guide

http://www.irs.gov/pub/irs-pdf/p15.pdf

U.S. Small Business Administration, Hire Your First Employeehttp://www.sba.gov/content/hire-your-first-employee

U.S. Department of Labor (DOL) Compliance: http://www.dol.gov/compliance

Missouri Department of Labor Resource Guide for Employershttp://labor.mo.gov/sites/default/files/pubs_forms/4466-AI.pdf

Missouri Business Portalhttp://www.business.mo.gov/hire.asp

Doing Business in Missouri: Hiring Employeeshttp://missouribusiness.net/article/doing-business-in-missouri-hiring-employees