4 Steps for Handling Paperwork...
If 2005 promises to be a good year, you may be thinking about hiring one or more new employees. Finding good workers is challenging enough, but when you add government-mandated forms to the process, you may feel overwhelmed. Don’t. Just follow these steps.
Step 1
Verify eligibility to work.Both the employee and the employer must complete the U.S. Citizenship and Immigration Services’ Form I-9, Employment Eligibility Verification, to show that the worker is legally eligible to work in the United States.
The form need not be filed with the Department of Labor, IRS or other government agency; simply retain it in your records. Download the form and instructions from http://uscis.gov/graphics/formsfee/forms/I-9.htm.
Step 2
Verify the employee’s Social Security number.Even if you see a Social Security card, make sure that the number is correct by verifying it with the Social Security Administration. If the number is incorrect, you’ll have hassles later on when you submit wage information at the end of the year.
You can verify the numbers for up to five employees at a time by calling 800-772-6270. To complete verification, you need the employee’s sex and date of birth. For details on this verification process, go to www.ssa.gov/emplyer/ssnv.htm.
Note: If the number is incorrect, determine the reason so that the employee can correct the problem (e.g., a person may have used a married name for employment while the Social Security number is still under a maiden name). Providing an incorrect number is not, in and of itself, grounds for termination of employment, but you can set a different company policy on this matter.
Step 3
Complete the withholding allowance certificate. Employees must fill out a federal form, Form W-4, Employee’s Withholding Allowance Certificate, so that you, as the employer, know how much federal income tax to withhold. Download the form from www.irs.gov/pub/irs-pdf/fw4.pdf. There may be comparable state forms for state income tax purposes.
Note: If the employee skips this step, you must withhold income tax based on the marital status of “single” with zero withholding allowances.
If the employee claims exemption from withholding (even though you know that the employee will earn more than $200 per week) or claims more than 10 withholding allowances, you must submit a copy of the form to the IRS when you file your next quarterly employment tax return (IRS Form 941, Employer’s Quarterly Federal Tax Return).
Step 4
Report new employees to your state. Every state requires employers to report additions to payroll so the state can check information against child support records and for other purposes (e.g., protecting against unemployment insurance fraud). Each state has its own procedures for reporting – it may be as simple as faxing a copy of the employees Form W-4.
For information about reporting new employees to your state (including links to each state’s requirements), go to www.acf.hhs.gov/programs/cse/newhire/employer/private/nh/newhire.htm. Copyright © 2005 by BWideas.com, Inc.
