Check the Checklist! Four Considerations When Hiring Your First Employee

May 13, 2022 So, you’ve started a business all by yourself. That is no small feat. You have chosen an awesome company name, your tax documents are all in order, and your website has been generating lots of traffic. Now, your business is booming, and you’re up to your nose in work! It might be time to hire your first employee. That will also be no small step, and there are many considerations to, well, consider. Here’s a checklist to keep in mind.

By: Brian R. DeMocker

So, you’ve started a business all by yourself. That is no small feat. You have chosen an awesome company name, your tax documents are all in order, and your website has been generating lots of traffic. Now, your business is booming, and you’re up to your nose in work! It might be time to hire your first employee. That will also be no small step, and there are many considerations to, well, consider. Here’s a checklist to keep in mind:

  1. Protected Classes/Attributes: During the hiring process, before you select your first employee, understand what a protected class or attribute is. When selecting your employee from the applicant pool, there are certain attributes upon which an employer cannot base their decision. As general examples, an employer cannot refuse to hire someone because of the applicant’s race, skin color, or sex. That same employer could, however, decide not to hire somebody because the employer doesn’t like the applicant’s neon green shirt. The applicable characteristics upon which an employer cannot base its decision will be listed in federal statutes (such as Title VII, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), the Genetic Information Nondiscrimination Act (GINA), and many other federal laws), as well as any applicable state law concerning anti-discrimination. It is also important to understand whether your company is a “covered employer,” which determines if a certain statute even applies to your business. Many federal statutes do not apply to very small employers, but many state laws effectively expand an otherwise-inapplicable statute’s coverage to include very small employers (sometimes, even employers with only one employee). It is important to know which laws apply to your company.
     
  2. Wage & Hour: Just like with laws addressing protected classes, first determine what wage and hour laws may apply to your company. If certain wage and hour laws apply, you will need to keep up to date with the federal minimum wage and your state’s current minimum wage. In many cases, state minimum wage exceeds the federal minimum wage. To avoid issues down the road, you should also determine right out of the gate whether your employee is exempt from specific pay standards, such as minimum wage and overtime requirements. Certain wage and hour laws carve out various exemptions. There can be certain job duties (not job titles) that fall under such exemptions. But be careful about how your new employee is paid to avoid costly disputes later. These rules can be very nuanced.
     
  3. Recordkeeping: There are several reasons to maintain quality, up-to-date recordkeeping for employees, some of which are even required by law. Whether it is paystubs and compensation data, disciplinary or termination documentation, leave records, or something else entirely, you should make sure to adhere to all statutory requirements. Not only are there requirements for some of this data to be kept for a certain period of time, but it can also help avoid factual disputes in the future in case an employee decides to file a lawsuit.
     
  4. Develop Policies and Stick to Them: It may be a good idea, right from the start, to develop policies addressing various areas that will keep your business running smoothly, once an employee joins the team. Common examples of policies include anti-discrimination and harassment, safety, attendance or remote work, vacation and leave, mobile device management, bring-your-own-device, compensation/pay/bonuses, benefits, performance standards and expectations, and information security. While some of these policies may not need to be established before you hire your first employee, development and implementation of these policies will quickly become useful to maintain standardized treatment and expectations for the first employee and every employee hired after.

So, are you ready to hire your first employee? While you are now aware of many of the considerations on this checklist, it is always useful to discuss these items with legal counsel to get the latest insights into employee management.

For more information or assistance bringing on your first hire, contact the author of this post or visit our Labor & Employment Practice page to find an attorney in your area. You can also subscribe to this blog to receive email alerts when new posts go up.