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Tips When You Hire Employees in U.S.

2023-12-08
As a business owner, you must obtain the following information when you hire employees:

  1. Eligibility to Work in the United States

    You must use Form I-9 to verify the identity and employment authorization of individuals hired for employment in the United States. Both employees and employers (or authorized representatives of the employer) must complete the form.

  2. Employee’s Social Security Number

    You are required to get each employee’s name and Social Security Number (SSN) and to enter them on Form W-2. You should ask your employee to show you his or her social security card and record the information.

    Please note that an individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN.

  3. Employee’s Withholding

    You should have a Form W-4, Employee’s Withholding Certificate, on file for each employee. Ask all new employees to give you a signed Form W-4 when they start work. Make the form effective with the first wage payment. If employees claim exemption from income tax withholding, they must indicate this on their W-4. The amount of income tax withholding must be based on filing status and withholding adjustments as indicated on the form. If a new employee does not give you a completed Form W-4, withhold tax as if he or she is single. Additional withholding may be required on wages paid to non-resident aliens.

    A Form W-4 remains in effect until the employee gives you a new one. If employees claim exemption from income tax withholding, they must give you a new Form W-4 each year.

  4. Unemployment Insurance

    The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of the unemployment compensation to workers who have lost their jobs. As an employer, you need to pay both a federal and a state unemployment tax for your employees.

  5. Workers’ Compensation Insurance

    Worker’s compensation insurance is paid by the companies to provide benefits to employees who become ill or injured on the job. Worker’s compensation programs are administered by states. Please check with the state labor department for more information.

  6. Health Plans and 401(k) Plan

    For small business (with no more than 50 full-time employees), there are no legal requirement to provide the health insurance to employees. But employees usually prefer jobs when employers provide health insurance. Health insurance programs allow workers and their families to take care of essential medical needs. If you pay the cost of an accident or health insurance plan for your employees, including an employee’s spouse and dependents, the payments are not wages and are not subject to Social Security, Medicare, and FUTA taxes, or federal income tax withholding.  

    It is optional to offer your employee a 401(k) plan. It can show you value your employees and can also boost their satisfaction. And both employers and participants in qualified plans may take advantage of significant tax benefits that include taking a deduction for contributions to the plan (employer) and sheltering income and plan earnings from income tax until distributed (participant).

[Reference]:
https://www.irs.gov/zh-hans/businesses/small-businesses-self-employed/hiring-employees

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

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