Hiring Your First Employee?
Here's the checklist you actually need!
Hiring your first employee is a huge milestone. It means your business is growing—and it also means it’s time to shift from “just me” to “we.” But here’s the catch: the first hire is where a lot of small businesses unintentionally set themselves up for legal issues, messy payroll, or mismatched expectations.
As a fractional HR consultant, I help small business owners get this right from the start—without overcomplicating it. So if you're about to hire your first employee, here's the real-world checklist you actually need.
1. Get a Federal EIN (If You Haven’t Already)
You’ll need an
Employer Identification Number from the IRS to hire and pay employees legally.
👉 Apply online here
2. Register With Your State
Check your state’s requirements to:
- Register as an employer
- Set up unemployment insurance
- Comply with new hire reporting
(If you’re in Florida or another specific state and want help navigating the forms, I’ve got you covered.)
3. Set Up a Payroll System
You’ll need to:
- Withhold federal and state taxes
- Pay employer taxes (Social Security, Medicare, unemployment, etc.)
- Issue pay stubs and file quarterly returns
This is where a simple payroll provider like Gusto, QuickBooks, or Paylocity can be a lifesaver. I help my clients choose and set these up the right way.
4. Complete Form I-9 & Verify Work Eligibility
Every new hire must complete an I-9 form on their first day, and you must keep it on file. (Yes—even for your very first employee.)
Also consider enrolling in E-Verify if your state requires it.
5. Collect W-4 and Direct Deposit Info
Your employee must complete a W-4 so you know how much federal income tax to withhold. You’ll also need their banking info for direct deposit (and ideally, a voided check).
6. Draft a Simple Offer Letter or Employment Agreement
It doesn’t have to be fancy, but it should include:
- Job title
- Compensation
- Start date
- Work schedule
- At-will employment language (if applicable in your state)
Need a template? I build custom versions for clients all the time.
7. Write a Basic Job Description
Clarify the role, key responsibilities, skills required, and who they report to. It helps align expectations from day one—and protects you later.
8. Create a Mini Employee Handbook
Even with one employee, you need to cover:
- Work hours
- Holidays/time off
- Payroll schedule
- Code of conduct
- Anti-discrimination and harassment policy
- How to handle complaints
Don't worry—it can be short. I often create 5–7 page handbooks for businesses this size that hit all the right legal and cultural notes.
9. Display Required Labor Law Posters
Yes, really. You’re now required to post federal and state labor law notices—even in a home office. You can order them as a bundle or use a digital solution if your team is remote.
10. Consider Workers’ Comp and Benefits
In many states, workers' compensation is mandatory—even with one employee. It’s also time to think about offering PTO, health insurance, or even a retirement plan. You don’t have to offer everything—but you do need to understand your obligations.
Bonus: Know When to Ask for Help
Hiring your first employee is the best time to get HR help—not after you’ve made mistakes. A fractional HR consultant can:
- Set up your systems from day one
- Create your policies and documents
- Help you hire confidently and legally
- Stay on-call as you grow your team
The Bottom Line
You don’t need a full HR department—you just need a solid foundation. Get the basics right, and your first hire won’t just help your business grow—they’ll help it grow the right way.
📩 Thinking about hiring your first employee? Let’s talk. I’ll walk you through the process step by step and make sure you’re protected, compliant, and ready to lead.
