What are my requirements when hiring a new employee?
When hiring a new employee, businesses must comply with certain requirements, such as minimum wage standards, number of hours, working conditions, workers’ compensation insurance, and proof of residency.
📝 Registration Form for Employers
Businesses are required by the state to file a registration form within 15 days after paying more than $100.00 in wages to one or more employees. No distinction is made between full-time and part-time or permanent and temporary employees in meeting this requirement. Once you register with the state, you will be issued a State Employer Identification Number (SEIN) that is unique to your business, the state counterpart to the Internal Revenue Services Employer Identification Number (EIN). Both these numbers will be used to file your business taxes each year - so be sure to keep it safe!
Check out the California Employment Development Department website for more employer resources.
💵 Comply with Wage and Hour Laws
The California Department of Industry Relations house's the Labor Commissioner's Office. This office is in charge of enforcing labor laws, including wage laws and hour restrictions. Their homepage lists the current minimum wage, provides updates on other labor policies, and offers resources for employers.
You may want to check this website about once a year to see if there are any relevant updates for your business.
🏘️ Proof of Residency Requirement
As required by the federal government, employees hired after November 6, 1986, must provide proof of eligibility to work in the United States. This can be done through an I-9 Employment Eligibility Verification form. To apply for an I-9:
- Employee accepts offer for employment.
- Employee completes Section 1 of the form no later than the first day of work for pay.
- The employee gives the documents and form to the employer.
- Employer completes Section 2 of the form no later than the 3rd business from when the employee starts work for pay.
- If an Employee's work authorization expires, complete Supplement B of the application.
📄 Workers' Compensation Insurance
All employers (with at least one employee) are required to have workers' compensation insurance or receive state approval to self-insure the required benefits.
In addition to the large number of insurance companies offering plans for these required benefits, the State Compensation Insurance Fund offers policies to all employers.
Employers that do not have workers' compensation insurance or are not authorized to be self-insured can be subject to significant criminal and civil penalties.
🎫 Worker's Compensation Exemption Certificate
To be exempt from workers' compensation, an applicant or licensee must provide a completed Form CA 13L-50 (obtained through the California Division of Workers' Compensation), certifying under penalty of perjury that the business owner does not employ anyone in a manner that is subject to the workers' compensation laws of California.
Exemptions can be made for certain kinds of workers, including but not limited to:
- Sole proprietors
- Business owners
- Independent contractors
- Workers related to their employers
- Workers who receive lodging/food instead of wages
- Amateur sports officials