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Your First Employees on Board: Three Key Federal and State Requirements Every New Employer Needs to Know

Posted on in Business Law

new employee requirements, Arlington Heights employment law attorneyWhether you are a natural-born entrepreneur and are finally getting your first business off the ground or simply want to try your hand at a business venture you have been plotting for some time, preparation begins long before you open your doors for business. Existing business owners and new employers alike must comply with a number of state and federal regulations when hiring new employees to ensure they are operating their business legally.

Hiring Compliance

New employers looking to bring new hires on board are especially susceptible to making errors, often because they are misinformed or are unclear on the proper legal requirements. Sadly, simple mistakes can lead to costly lawsuits, which is why it is so important that you follow all state and federal regulations when you decide to go into business.

Three key requirements you need to be aware of when hiring new employees include:

1. You must obtain an EIN.

Also referred to as an Employer Tax ID or Form SS-4, an EIN (employer identification number) is something the IRS requires every employer to have before hiring their first employee. This number is used to report business-related taxes and other documents to the IRS. It is also necessary for reporting various information about your employees to state agencies.

2. You must keep records of employment taxes.

The IRS also requires you to keep records on withholding taxes for your business. There are three types of tax withholding you will need: federal income tax withholding, federal wage and tax statement, and state taxes. The good news is this requirement does offer a special advantage to business owners, as it aids in monitoring overall business progress and helps you keep track of deductible expenses and receipts.

3. You must verify eligibility.

It is imperative to examine every employee's citizenship and determine their eligibility to work in the United States. Federal law requires that all employers complete Form I-9 within three days of hiring a new employee. While not required to submit the form to the federal government, business owners are expected to keep it on file for three years after the date of hire or at least one year after the employee is terminated, whichever applies first.

As you prepare your business for operation, you will need to meet these and other requirements to make sure you are in line with the law. When you are ready to put things into motion, speak with a knowledgeable Arlington Heights business law attorney to prepare your business venture for success. Contact A. Traub & Associates today at 847-749-4182 for a consultation.


Illinois State Bar Association DuPage County Bar Association Northwest Suburban Bar Association American Inns of Court DuPage Association of Woman Lawyers National Association of Woman Business Owners Illinois Association Criminal Defense Lawyers DuPage County Criminal Defense Lawyers Association
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