If you’ve chosen to expand your business by adding employees, take some time to do it right. Recognize there are more employment laws in California than any other state and hiring your first employee makes you subject to many of them.
You will lose, conservatively, at least 25% of your own productivity while getting your employee up and running. Delegating seems easy until you find it takes a great deal of your time because you must also provide training. Consider hiring a temp initially so you have time to explore what skills and qualifications your employee will really need. You might realize the duties you thought you’d give your employee aren’t practical in the day-to-day setting.
While you are thinking about what you want in that employee, start prepping to become an employer. You’ll need several things in place on or before your employee’s first day:
• Obtaining workers’ compensation insurance is legally mandatory. You can usually obtain it from the same broker who provided your liability insurance. The cost for this insurance is based on two factors: the amount of salary the employee(s) will earn over the next year and the type of risk involved in each job.
• Find a payroll provider to process your payroll at least twice per month. Set things up so the check date is 5-7 days after the timecard period (and, yes, you absolutely need accurate timecards). Most payroll companies charge per processing but you can find a company for $50-100 per month. Don’t try to do it yourself… IRS isn’t kind to companies who don’t pay payroll taxes on time.
• Realize your employee is likely to be non-exempt… meaning s/he is paid hourly. The choice of salaried versus hourly isn’t your decision or the employee’s. California law dictates whether or not an employee can be salaried and, if they are eligible, you are required to pay a minimum salary of $3,120 per month regardless of how few hours worked. That minimum increases to $3,467 per month on 1/1/2016 so plan ahead.
• Federal and California laws also require numerous forms be given to your new hire. Now is the time to talk with a human resources professional to understand the documentation and procedural compliance issues you’ll face as an employer.
If you move forward with an awareness of what it takes, becoming an employer can be a great experience for you and your business!
About Your Columnist
CJ Westrick is a featured columnist for Women Taking Charge, the official blog of Connected Women of Influence, where she covers all things human resources and managing people in the workplace. CJ Westrick, SPHR, has been in human resources (HR) management for over 20 years and has maintained her SPHR (Senior Professional in Human Resources) national certification since 2002. She started HR Jungle, a human resources consulting firm, in 2006 to provide senior-level HR expertise to businesses without internal HR.
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