What do I need to hire my first employee?

An Employer Identification Number, state employer accounts (unemployment insurance and, where there is a state income tax, withholding), workers' compensation coverage, a written offer, a completed Form I-9 and Form W-4, a new hire report to your state, the required posters and a payroll set up to your state's minimum wage and payday rules. The SBA's hiring guide lists the same federal steps.

How long do I have to report a new hire?

The Office of Child Support Services says: "Federal law requires employers to report basic information on new and rehired employees within 20 days of hire to the state where the new employees work." Some states set a shorter deadline or ask for more data, so check your state's new hire registry.

When does Form I-9 have to be completed?

USCIS says employees must complete and sign Section 1 no later than their first day of employment, and that the employer must complete and sign Section 2 within 3 business days of the date of hire (the first day of work for pay).

Yes. The IRS says you never have to pay a fee for an EIN and warns about websites that charge for one.

Do I need workers' compensation for one employee?

Workers' compensation is set by each state, and the rules on who must be covered differ. The Department of Labor directs private-sector workers to their state workers' compensation board. Check your state's board before the first day.

What posters do I need to put up?

Federal posters depend on which laws cover your business. The Department of Labor's FirstStep Poster Advisor works out which federal posters apply; state posters come from your state labor office.

What is the minimum wage for my first employee?

It depends on your state and sometimes your city. The Department of Labor's state minimum wage page lists each state; pick your state on this page to see the rule we have verified, with its source.

How to Hire Your First Employee: State-by-State Steps

What to say

The offer call is short. Say the offer, then put everything in writing the same day so the details match.

Offer“We would like to offer you the [job title] position, starting on [date].”

Pay and schedule“The pay is [rate] per [hour / year], paid [weekly / every two weeks], and the schedule is [days and hours].”

Conditions“The offer depends on [the background check / references], and on the first day you will fill in the employment eligibility and tax forms.”

Next step“I will email you the offer letter today. Could you reply by [date] to let me know?”

What to leave out

Promises about future raises, promotions or job security you are not ready to put in writing
Questions about age, pregnancy, family plans, religion, disability or national origin
Asking for specific immigration documents before the employee has accepted the job
Starting work before the pay rate and schedule are agreed in writing

5 common mistakes

Paying before registering. Running the first payroll without an EIN and state accounts means late tax deposits and catch-up filings. The SBA's hiring guide puts the EIN and state tax IDs first.
Missing the new hire report. It is a separate step from payroll. The Office of Child Support Services says federal law requires employers to report basic information on new and rehired employees within 20 days of hire to the state where the new employees work.
Completing Form I-9 late. USCIS says the employer must complete and sign Section 2 within 3 business days of the first day of work for pay. Put it on the first-day checklist.
Calling an employee a contractor. Paying someone as an independent contractor when they work as an employee creates tax and wage problems later. The IRS hiring page covers what to collect from each employee.
Setting the pay schedule without checking the state. States set how often employees must be paid, and the rules differ. The Department of Labor's state payday table shows the differences; pick your state on this page for what we have verified.

Rules that matter in your state

State minimum wageChoose your stateRules with official sources

Choose your state above to see the rule we have verified, or check it with your state labor office.

Report an error

How often you have to payChoose your stateRules with official sources

Choose your state above to see the rule we have verified, or check it with your state labor office.

Report an error

State minimum wage. The lowest hourly rate you can pay in your state, next to the federal rate.
How often you have to pay. Weekly, every two weeks, twice a month or monthly, depending on the state and sometimes the type of job.

Every state's rule, side by side, is in the state rulebooks.

Related guides

How to hire your first employee

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