Becoming an employer

Employees add another layer of complexity to your business so think it through carefully before hiring. Hire the right people, train them well, keep them happy so they will stay, and be aware of taxes and legal requirements. Initially, you may want to consider hiring outside contractors or temporary help instead. (Make sure you satisfy IRS requirements for contractors.)

Plan your hiring

Hiring employees is expensive and shouldn't be approached casually. Make sure your decision to have employees fits in with your goals as outlined in the business plan. Write out a job description that indicates exactly what is expected of each employee. Interview several people and select the one you feel has the best qualifications. The majority of employers consider attitude of potential employees as the number one trait in their hiring decision. It is a good idea to have a 30 or 90-day trial period before taking someone on permanently. The wrong employee can cause a great deal of damage to your business.

Train employees well

Training is expensive but necessary. You want well-qualified employees who will do things the way you need them done. A well-defined company policy handbook plus a job description outlining duties, responsibilities, ethical standards, and criteria for success will be valuable. You may want to invest in your employees by sending them to special trainings. Small business owners should pay special attention to cross-training employees in areas other than those specifically defined in their individual job descriptions.

Working with employees

You want your employees to be satisfied, motivated, and involved with your business. Keep the lines of communication open. Let your employees participate in the goals of the business and give them constructive feedback--positive as well as negative--on their progress.

Legal requirements

Talk to your accountant and lawyer to make sure all the paperwork and legal requirements of having employees are met. Keep written records of personnel matters. There are many laws regarding working conditions, minimum wages, and safety considerations. Some of the areas you should consider include:

• Workers' compensation insurance
• Employee Taxes
• OSHA requirements

Sites for California businesses:

• Employment Development Department
• Labor Market Information

Other sites of interest:

• Frequently asked questions from OSHA
• National Center for Employee Ownership
• Pension and Welfare Benefits Administration
• Social Security Administration: Employer Reporting Instructions & Information
• The USDOL OSHA Home Page
• U.S. Business Advisor
• U.S. Department of Labor
• Workplace Rights and Independent Contractors
• Human Resources
• Quality Hiring Process Brings Quality Employees
• Employing Workers
• Independent Contractors

This document was prepared by the San Joaquin Delta College Small Business Development Center. Send comments to: Gillian Murphy

Acknowledgements, disclaimers, etc.