After you’ve gone through an extensive recruiting process and found the perfect person to fill a position, there’s still a lot to do to get your new hire onboard, from filling out (many) forms to conducting an orientation. For you, an entrepreneur, these “HR formalities” might feel like a hindrance, but doing all the paperwork and having a delightful onboarding makes sure that you comply with all government requirements and that your new employee will have the context and tools to succeed at your company.
In this blog post, we’ll discuss some processes and topics to consider while onboarding any new employee.
Form I-9: Employment Eligibility Verification
According to the US Citizenship and Immigration Services, Form I-9 is “used for verifying the identity and employment authorization of individuals hired for employment in the United States.” Virtually all new employees must fill out Form I-9, including interns, 1-day workers, non-Americans authorized to work in the US, and self-employed founders. (Independent contractors are not employees and thus do not need to complete a Form I-9.)
Some companies use E-Verify, a free online service by that confirms an employee’s eligibility to work in the US by instantly cross-referencing information from the employee’s Form I-9 with a database of the Department of Homeland Security and the Social Security Administration. This is required for Federal contractors and companies operating in certain states. For all other companies, E-Verify is voluntary.
New Hire Reporting
All employers are required by state and federal law to report basic information on new and rehired employees to the State Directory of New Hires (SDNH) of the state in which the employee works. The National Directory of New Hires (NDNH) will aggregate all the data from each of the SDNHs in their master database. Child support agencies will then use the database to locate parents who owe child support and issue income withholding orders.
Use the Office of Child Support Enforcement website to find your state’s SDNH website. On it, you’ll find the exact timeline, reporting guidelines, and filing directions.
Company Policy Agreement
Every company has its own unique set of internal policies, often including but not limited to:
- Code of Conduct
- Equal Employment Opportunity
- Harassment Policy
- Paid Leave Policy
- Travel Policy
- Snow Day Policy
- Referral Bonus Policy
- Company Holidays
There are plenty of benefits of circulating your company’s policies and getting your employee to sign an acknowledgement about them. Having signed documents can protect the company from legal actions or even employee fraud. The policies themselves will also help create a non-discriminatory workplace and can assist in protecting the company from labor law violations.
Employment-Related Documents
You’ll want to have signed documents in your data room that include the following:
- Offer letter
- Confidentiality agreement
- IP assignment agreement
- Non-compete agreement (if applicable)
- Non-solicitation agreement (if applicable)
The offer letter outlines the terms of employment, including salary, awards or other incentives (equity), manager, position, and start date (read more about the perfect offer letter). Remember to actually grant equity if you promised equity! Learn more about issuing equity and the Stock Incentive Plan on our blog.
The confidentiality agreement (aka non-disclosure agreement or proprietary information agreement) protects your ideas and IP by keeping sensitive information within the company.
The IP assignment agreement transfers the IP rights from an employee to the company. This ensures that the company has clear ownership of the IP necessary for the business to operate. Learn more on our dedicated blog post.
A non-compete agreement prohibits employees from starting a competing business or working for a competitor for a certain period of time within a certain geographic area after their termination. Non-compete clauses can be tricky, as some states, like California, prohibit them. If you are thinking of including a non-compete, you should discuss the terms with your lawyer.
A non-solicitation agreement prohibits the employee from luring company clients, employees, or vendors away from your company for a certain period of time after their termination.
Employment Background Checks
A background check is a deep dive into an employee-to-be’s commercial, criminal, and professional records. This could include criminal history, sexual offender status, driving history, education history, and professional licenses.
Before performing a background check on an employee-to-be, you must first ask them for written permission. Plenty of companies provide background check services, but ultimately, it is up to you, the employer, to decide how to use it.
Form W-4: Employee's Withholding Allowance Certificate
Have your new employee fill out Form W-4, their Employee’s Withholding Allowance Certificate on their first day so that you can get their information into your payroll system before their first paycheck. If they want some help completing their W-4, direct them to the IRS Withholding Calculator.
Payroll
Make sure to set up your payroll system! There are a variety of payroll service providers that take care of everything for you, from deducting taxes to mailing out checks or setting up direct deposit. Fidelity worked with Paylocity to take care of all things payroll.
Once you have your payroll set up, make sure to add your new employee to it. This will ensure they get paid and you won’t need to deal with complicated withholdings calculations. Check with your provider on how to set them up for direct deposit (instead of paper checks).
Benefits Enrollment
Benefits include a variety of packages, like healthcare, life insurance, as well as dental and vision insurances. Work with a provider to create a plan that works for your company and make this information known to your new employee so that they can take full advantage of these benefits. Remember, a healthy employee is a hard-working employee!
Equal Employment Opportunity (EEO) Demographic Survey
The EEO survey allows the federal government to collect demographic information from companies. If your company has more than 100 employees (or is a federal contractor), your company is required by the EEO Commission to complete an annual EEO survey each year by March 31st. For the individual employee, however, completing the EEO survey is voluntary. Employers can submit the EEO surveys online.
More Than the Documents
A wise philosopher once said, “Onboarding a new employee takes a village.” The philosopher would also say that there is more to onboarding than just forms, like meeting the manager and team on Day One, having an introductory team lunch, getting a tour of the office and nearby lunch locations, getting a welcome packet, going through an orientation presentation or program, receiving necessary job and company training, getting any devices setup, receiving access cards, and more.
Each company has a different onboarding process, but the process should be consistent, standardized, and designed to help the new employee succeed. Having a set procedure not only provides quality assurance for the onboarding experience, but also makes it easier to onboard new employees when the company is growing rapidly.
How can Fidelity help?
We know that onboarding new employees can be tedious and time-consuming. However, onboarding an employee right will ensure that they start off on the right foot.
Fidelity helps you centralize and automate your HR efforts so that you can focus on building your company. Fidelity helps you onboard new employees with an automated new hire workflow and onboarding task management. Not only that, our work with Paylocity not only allows you to automate your payroll process but also integrate your HR and payroll functions.
Learn more on our website!
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
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