Before you hire the first employee for your business, make sure you understand the gauntlet of government regulations and administrative requirements you will face.

There are many, many requirements that need to be taken care of, but here is a list of some basic legal and administrative obligations:

1. Obtain an employer identification number (EIN).
   This is similar to a Social Security Number for a business and will allow you to submit documents to the IRS. An EIN can be obtained by filing IRS Form SS-4, which can be downloaded on the IRS website.
2. Get worker’s compensation insurance.
   In many states employers are required to buy worker’s compensation insurance, which protects them from lawsuits resulting from work-related accidents. Though it is highly recommended, you should investigate your state regulations to determine if it is required.
3. Have employees fill out Form W-4.
   Form W-4, which is the Withholding Allowance Certificate, allows employees to claim a certain number of allowances for tax purposes, and helps employers withhold the correct amount from the employees’ paychecks. If employees wish to change the number of allowances they claim, they’ll need to fill out a new form with their employer.
4. Fill out Form I-9.
   U.S. Citizenship and Immigration Services requires employers to fill out Form I-9, which is the Employment Eligibility Verification form, for each new hire. This form is used to verify that your new employees are eligible to work in the United States. This form does not need to be filed with the USCIS, but does need to be kept on file for three years and must be provided upon inspection by the USCIS.
5. Report new hires to your state’s new hire reporting agency.
   The Administration for Children and Families, part of the U.S. Department of Health and Human Services, requires that employers report all new employees to their state’s new hire reporting agency. The information is used to locate parents who owe child support.
6. Determine what OSHA regulations apply.
   All employers (with few exceptions) need to comply with the requirements of the Occupational Safety and Health Act. You can check out the OSHA website to review the rules.
7. Withhold taxes.
   Set up a payroll system so that income taxes, Social Security, and Medicare taxes are automatically withheld.
8. Deposit taxes.
   Taxes, Social Security, and Medicare paid by the employee, along with the company’s portion of the Social Security and Medicare taxes, must be handed over to the government on a periodic basis. You can do this a few different ways.
   a. Larger employers deposit through the Electronic Federal Tax Payment System;
   b. You can mail or deliver these taxes to a Federal Reserve Bank or authorized financial institution;
   c. If quarterly withholdings are less that $1,000, you can pay them through your quarterly tax return (Form 941);
9. File Form 940 annually.
   The Employer’s Annual Federal Unemployment Tax Return (Form 940) can be obtained on the IRS website.
10. File Form 941 quarterly.
    The Employer’s Quarterly Federal Tax Return (Form 941) can be filed via mail, or if you’re eligible, it can be filed using the 941TeleFile system.