Tuesday, May 7, 2013

Best Practices: Employees Part III

We have reviewed the best way to prepare for hiring employees which means planning what the position will look like and reviewing all the laws and regulations regarding employment.  We also talked about the best way to hire an employee.  Now we will discuss what to do once you have found the right employee for your business.

Once you have hired your employee, you will need to have him/her fill out a myriad of paperwork.  All employees must complete an I-9, a W-4 and the state equivalent (WT-4 in Wisconsin).  The I-9 should be filed in a folder with any other I-9s you have/will accumulate.  The other forms will go into a folder for that specific employee.  You will also need to complete the online New Hire filing in the State of Wisconsin https://wi-newhire.com/ 

If the position you are filling warrants it, you will want to have an employment contract signed by the employee and this will also go into the employee's folder.  It is a good idea to have initial employment contracts reviewed by your attorney.  If you don't need a contract, you will still want to provide the employee with written employment policies and the job description you created for the position before you started the hiring process.  The employee should sign these to acknowledge he/she has received them and read them and this should also be placed in the folder.

It is always a good idea to have employees start with a probationary period.  An employee is considered an at-will employee during a probationary period which means they have no expectation of continued employment and can be removed for any reason prior to the end of the probationary period.  The fact is, no matter how thorough the interview process, you never know how well the employee will work out until they get started.  Using a probationary period assures the business that only the employee who is a good fit with work ethic, attitude, competency and skills will remain part of the team.  The probationary period is typically at least three months and can be as long as 12 months. 

Creating a solid training process is another must for employers.  Employees will perform only as effectively as their training so putting the time into bringing a new employee into the business is very important.  This should include written manuals with policies and procedures as well as hands on experiences.

Once again, the secret to success in being an employer is to plan, plan, plan.  Plan how to be an employer, plan how to advertise for an employee, plan how to train your employee. 

Wednesday, May 1, 2013

Best Practices: Employees Part II

This week we will go into greater detail on some of the laws and rules you need to be aware of before you become an employer.  As we noted last week, the Department of Labor and the State of Wisconsin have websites with all the information you need as an employer. 

Some things to look for on these websites:  The information you need to maintain in employment files for each of your employees, the posters you need to have displayed somewhere in your business, the rules about unemployment insurance (both state and federal) and the rules for filing and paying payroll taxes.

A key piece of information regarding payroll taxes: The Federal Government takes payroll taxes very seriously and failure to remit taxes withheld from employee paychecks is considered theft.  Falling behind on remiting payroll taxes has severe consequences.  Paying 1-5 days late can result in a 2% penalty, 6-15 days late brings a 5% penalty and 16+ days means 10% penalty.  Depending on the amount the business was to remit, this can be a significant amount of money.  The government can also proceed with civil proceedings such as filing liens against your property until the taxes are paid in full and criminal proceeding can and do occur and can result in imprisonment. 

The Federal Government is also allowed to go after personal assets if a business fails to remit payroll taxes even if the business is an LLC.  This is how seriously they take payroll taxes!

Again, the message to take away from this article is to do your homework before you become an employer.  There are many different payroll tax providers who will assist in setting up your payroll process or teaching you to maintain the system.  Unless you have experience with payroll, it is advisable to use one these experts to get you off on the right foot as an employer.