An HR checklist for new US employers
Reviewed by Mellow Editorial Team, HR & payroll content team
Hiring your first US employee requires completing a specific set of federal and state registration steps, withholding and remittance obligations, and recordkeeping tasks before — or within days of — your new hire's start date. Miss any of them and you face penalties, back taxes, or legal exposure.
Get your tax IDs in order
Before you can run payroll, you need two things:
Employer Identification Number (EIN). Apply through the IRS. It is free and you can get one online in minutes. You need this before you file anything or open a business bank account for payroll purposes.
State tax account(s). Most states require you to register separately for state income tax withholding and state unemployment insurance (SUI). If your state has no income tax — Texas, Florida, and Washington are common examples — you still need to register for unemployment. Check your state's department of revenue and department of labor websites; processing times vary from same-day to several weeks, so do this early.
Complete new-hire paperwork
Three documents are non-negotiable on or before day one.
Form I-9. You must verify every employee's identity and work authorization. The employee completes Section 1 on their first day; you complete Section 2 within three business days. You do not file this form — you retain it and make it available for inspection.
Form W-4. The employee uses this to tell you how much federal income tax to withhold. Federal income tax is progressive, running from 10% to 37%, and the W-4 drives the calculation. Keep it on file; you do not submit it to the IRS unless asked.
State withholding form. Most states have their own equivalent of the W-4. Issue it alongside the federal form.
You also need to report every new hire to your state's new hire reporting agency, typically within 20 days of the hire date. States use this data to enforce child support orders.
Set up payroll withholding and remittances
Once someone is on payroll, you are responsible for calculating, withholding, and remitting taxes on a defined schedule.
FICA taxes. You withhold Social Security at 6.2% of wages up to the annual wage base, plus Medicare at 1.45% with no cap. You match both amounts as the employer. High earners trigger an additional 0.9% Medicare surcharge on the employee side only. Get the current wage base from IRS Publication 15 each January — it adjusts annually.
Federal unemployment (FUTA). This is employer-only; you do not withhold it from employee wages. Pay it quarterly if liability exceeds the threshold.
Deposit schedules. The IRS assigns you a deposit schedule — monthly or semi-weekly — based on your lookback period. New employers default to monthly. Use the Electronic Federal Tax Payment System (EFTPS) to remit. Missing a deposit deadline triggers a percentage-based penalty that compounds quickly.
Quarterly reporting. File Form 941 each quarter to report wages paid, taxes withheld, and your employer tax contributions. Mark the deadlines: April 30, July 31, October 31, and January 31.
Provide required notices and benefits
"At-will" employment is the default across most of the US, but several obligations attach to every employment relationship regardless.
Workers' compensation insurance. Nearly every state requires it. Obtain coverage before your first employee starts work; the rules and carriers differ by state.
Unemployment insurance. Register and pay SUI contributions as noted above. Rates vary by state and experience rating.
Federal and state labor law posters. The Department of Labor requires you to display specific posters (Fair Labor Standards Act, FMLA if applicable, OSHA, etc.) in your workplace. Most are free to download. States add their own requirements.
FLSA classification. Decide from the outset whether each worker is an employee or an independent contractor, and whether employees are exempt or non-exempt under the Fair Labor Standards Act. Misclassification is one of the most common — and costly — employer mistakes.
There is no federal statutory paid annual leave or sick leave, but several states and cities mandate paid sick leave accrual. Audit your location before assuming none applies.
Prepare for year-end reporting
Good recordkeeping throughout the year makes year-end straightforward.
You must furnish Form W-2 to each employee and file copies with the Social Security Administration by January 31 following the tax year. If you used independent contractors, issue Form 1099-NEC for any individual paid $600 or more in the year, also by January 31.
If your workforce spans multiple states or countries, the reporting layer multiplies. Understanding how payroll works across different jurisdictions before you hire — not after — saves significant remediation time.
One final note on non-competes: if you hire in California, non-compete clauses are unenforceable under state law. Several other states have moved to restrict them as well. Review any employment agreements with counsel before issuing offer letters.
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