Good evening Mr. Collier,
I hope life is treating you well. When you get a moment could you please answer the below question?
Thank you for your time!

What’s the first step in hiring a W2 employee?

On the bureaucracy side:

– Obtain Workman’s Compensation insurance
– Research rates and filing requirements of Unemployment Compensation (State and Federal)
– Be prepared to pay/file Social Security (6.2%) and Medicare (1.45%) for a total of 7.65% to be paid by employer and deduct the same amount from paychecks, frequency with which you must file with IRS and pay depends on size of payroll.
– Be prepared to deduct Income Tax withholdings from paychecks as well. There are services that will do all this for you for a fee; we use ADP.
– Starting out you may be exempt from providing Health Insurance, HOWEVER it is a REAL competitive advantage (plus providing medical security is a nice thing to do!) to offer a GOOD plan; the more established your workforce (families!) the more important this has become.
– At some point, you might consider offering a 401K retirement plan that allows for tax-free contributions from employee’s paychecks AND the earnings grow tax-free as well! Employers do not have to contribute but most do; The Collier Companies matches Team Member contributions dollar for dollar (100% match is VERY unusual) up to 10% of salary. Good benefits help attract and retain good people.

On practical business side:

– Train! Many small owners do not realize how much of what they do, of their dedication to quality and customer service, their understanding of their business plan, etc. is almost instinctual and they fail to take the time to proactively and explicitly pass on this knowledge and/or ensure that their employees have the same commitment. They may consider it common sense without realizing that it is not common practice or remembering how long it took them to acquire the skills/knowledge they now take for granted.
– Study motivation/how to manage/lead. One Minute Manager is an excellent starter. As many a student knows, simply being an expert in an area doesn’t automatically make one a good teacher. Passing on knowledge effectively is a skill set all its own.
– Respondent Superior: Legally you are responsible for the actions of an employee taken in the course of their employment. Run background checks, check references, stay awake.
– Employment at Will: in Florida (and many states) while you can fire someone for no reason at all, there are many, many reasons for which you can NOT fire: check ADA and discrimination statues at local, state, and federal levels. If you wish to fire someone, it is advisable to document your reasons via coaching sessions dealing with specific issues that they acknowledge in writing having received. Do this for two reasons: One, you genuinely wish your employees to succeed and grow and two, if you fire for valid reasons, your Unemployment Compensation rates are less likely to go up.
– Overtime! Unless someone is exempt under the federal Fair Labor Standards Act (FLSA, see below) you should carefully track hours in real time to avoid liability for paying one and a half the hourly rate for working over 40 hours.

Exempt Employees (info cribbed from internet)

Exempt employees are not granted the protections of the FLSA and are therefore not entitled to overtime pay. Some types of jobs are considered exempt by definition under the law, including outside sales staff and airline employees. But for most professions, an individual is an exempt employee if he or she meets the following three tests:

  1. Is paid at least $23,600 per year (or $455 per week)
  2. Is paid on a salary basis
  3. Performs exempt job duties

The salary requirement does not apply to certain professions that pay on an hourly basis, including physicians and schoolteachers.

Exempt Job Duties

The third test for exemption status concerns the type of work an employee performs. As a rule of thumb, exempt employees tend to perform relatively high-level duties with respect to the company’s overall operations (regardless of job title). The FLSA breaks this out into three main categories: executive, professional, and administrative.

Exempt Job Duties: Executive

An employee is exempt from FLSA rules as an executive if he or she regularly performs all of the following:

  1. Supervises two or more other employees
  2. Primary duty of the position is management
  3. Has genuine input into other employees’ job status (hiring, firing, assignments, etc.)

This determination is made on a case-by-case basis, as each duty leaves room for interpretation. As a rule of thumb, an employee working exempt executive duties is “in charge” or considered “the boss.”

Exempt Job Duties: Professional

Exempt professional employees include lawyers, physicians, teachers, architects, registered nurses and other employees performing work requiring advanced education or training. These typically are intellectual jobs requiring specialized education and involving the use of discretion and judgment. This exemption does not include skilled trades, mechanical arts or other work that does not require a college or postgraduate degree.

This exemption also includes creative professionals such as writers, journalists, actors and musicians. Typically, such jobs require imagination, talent and some unique contribution to the employer.

Exempt Job Duties: Administrative

This exemption is for employees whose main duties involve the support of the business, such as human resource staff, public relations or payroll and accounting. As a rule of thumb, administrative employees do not directly produce what the company sells; however, they are at a much higher level than those performing simple clerical work.

The FLSA defines exempt administrative job duties as follows:
(a) office or non-manual work, which is
(b) directly related to management or general business operations of the employer or the employer’s customers, and
(c) a primary component of which involves the exercise of independent judgment and discretion about
(d) matters of significance.

As always, I share what I most want and need to learn. – Nathan S. Collier