The Early Years of a Business, Part 4: Documenting New Hires

This post is the fourth in our series about the early years of a business formation.  Read more in parts One, Two, and Three.

Another step most small business owners take in the first few years is hiring employees or staffing with independent contractors.  All of these professional relationships should be documented through the following agreements, forms, and letters:

  • Employment Contract or Employment Offer Letter. This document should include information such as the job title, scheduled work days/hours, term (or length) of employment, compensation details, responsibilities, and termination conditions.
  • Required Employment Forms/Filings. Some of these forms are likely ones that you are familiar with: the W-4 form for employees (W-9 for contractors), I-9 Employment Eligibility Verification form, State Tax withholding form, and direct deposit form.  You can also run the candidate through E-Verify, a system that checks employment eligibility in the U.S.
  • Necessary Agreements and Policies. When staffing your business, you can begin protecting your business from the get-go by having your staff sign the following agreements: non-competition agreement, non-disclosure agreement, employee invention form, employee handbook with an acknowledgement form, drug and alcohol testing consent forms, job analysis forms (this may encompass responsibilities, goals, and performance evaluation criteria), employee equipment inventory list, confidentiality and security agreements.  Depending on your business type, this list may vary or lengthen to suit your needs.
  • Employee Benefits Documentation. If you offer benefits to your employees, you may need documentation of the following: health/life insurance, mobile phone plan, company vehicle lease, stock options, retirement plan, disability insurance, paid time off or vacation policies (this would also include paid holidays), sick leave, employee wellness perks (such as gym memberships), and tuition reimbursement for continuing education.
  • Personal Data Collection. You also need to gather your staff’s personal data and keep it updated with the following: emergency contacts, brief medical history or relevant impairments, and any food allergies or preferences if there is a company-funded lunch or related event.

Employees are the small business owner’s greatest asset, but they do not come without risks.  Start your employer-employee relationship out the right way through proper documentation.  It will mitigate your risk, and it will also help you get to know your staff and keep you on the same page.

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