At minimum: an EIN, a state withholding account (in a state with income tax), a state unemployment account, workers’ compensation coverage where your state requires it, a Form I-9 and a Form W-4 for the new hire, a new-hire report to your state within its deadline (20 days at most under federal law, as few as 7 in some states), and the required posters on the wall.
None of it is hard. The trouble is that it lives at several different agencies, each with its own clock, and the clocks start on the employee’s first day. This is the order to do it in.
Before anyone starts: the accounts
An EIN. The IRS lists hiring employees as one of the reasons you need an Employer Identification Number. It is free, the application is online, and an approved number is issued on the spot. The IRS says you never have to pay a fee for one.
A state withholding account. If your state has an income tax, you register with the state revenue agency before your first payroll. In Utah, for example, the Tax Commission issues the number through Taxpayer Access Point (form TC-69). Your state revenue agency’s website will say whether it taxes wages and how to register.
A state unemployment insurance account. This is registered with your state workforce agency. It also matters for your federal bill. Federal unemployment tax (FUTA) applies once you pay $1,500 in wages in any calendar quarter or have an employee in 20 or more weeks of the year. The rate is 6.0% on the first $7,000 of each employee’s wages, but you get a credit of up to 5.4% for state unemployment tax paid in full and on time.
Workers’ compensation. For private-sector workers this is a state program; the US Department of Labor points them to their state workers’ compensation board. The rules on who must carry it are set state by state, so check yours before the first shift. In Texas, coverage is not required for most private employers, but an employer without it (a “non-subscriber”) must tell the state it has no coverage and report injuries with more than one day of lost time.
On the first day: Form I-9 and Form W-4
Form I-9 proves identity and permission to work in the US, and it applies to citizens and non-citizens alike. The timing is set by regulation. The employee completes Section 1 at the time of hire, which means the first day of work for pay. You examine their documents and complete Section 2 within three business days. If the job lasts less than three business days, Section 2 is due on day one.
Keep each I-9 for three years after the hire date or one year after the person leaves, whichever is later. Keep them in their own folder, apart from personnel files, so you can hand them over cleanly if anyone asks.
Form W-4 tells you how much federal income tax to withhold. The IRS says to ask every new employee for a signed W-4 when they start. If you never get one, you withhold as if the employee is single. Collect each employee’s name and Social Security number too, because both go on the W-2.
The state withholding form. Some states have their own certificate. California’s is the DE 4 from the EDD. Your state revenue agency’s withholding page will say whether it uses its own form or relies on the federal one.
Within days: the new-hire report
Every new employee gets reported to your state’s new-hire directory, which child support agencies use to find parents who owe support. Federal law sets the outer limit: the report is due no later than 20 days after the hire, and it carries the employee’s name, address, Social Security number and first day of work, plus your name, address and EIN.
Most states use the full 20 days. Several are shorter, according to the federal Office of Child Support Services state chart, as of November 2026:
- Alabama and Maine: 7 days
- Georgia and Vermont: 10 days
- Massachusetts, Rhode Island and West Virginia: 14 days
- Iowa and Mississippi: 15 days
Some states also want independent contractors reported, and the same chart shows which. California asks for contractors paid $600 or more, New York for contracts over $2,500, West Virginia for $2,500 or more, and Connecticut for those expected to earn over $5,000 a year. Colorado, Florida, Illinois, Iowa, Maine, Massachusetts, New Jersey, Ohio, Oregon, Texas and Virginia include contractors too. If a payroll service files the report for you, get that in writing.
On the wall: required posters
Federal posting duties depend on which laws cover you, and the Department of Labor offers a free elaws Poster Advisor that tells you which ones apply. For most small private employers, that means the FLSA minimum wage poster, the OSHA “Job Safety and Health: It’s the Law” poster and the Employee Polygraph Protection Act notice. The FMLA poster joins the list at 50 employees. The EEOC’s “Know Your Rights” poster applies to employers covered by its laws, and Title VII coverage starts at 15 employees.
Your state labor department publishes its own posters. Every one of these is free from the agency. You do not need to buy a laminated bundle, though some owners like the convenience.
The offer letter (not on the federal list, but worth it)
The federal paperwork for a new hire is the list above: the I-9, the W-4, the new-hire report and the posters. An offer letter is not on it. Write one anyway. It is the first document a dispute will turn to, and it is far easier to write calmly now than to reconstruct later.
Keep it short: job title, start date, pay rate and pay schedule, whether the job is hourly (non-exempt, meaning overtime after 40 hours a week) or salaried exempt, who they report to, any conditions such as a background check or license, and a plain statement that employment is at will if that is how you operate. Leave out promises you would not put in a contract, such as “a job for as long as you want it.”
Example. Say a two-truck pest control company in Texas hires its first technician, starting Monday, March 1, 2027. The I-9 Section 1 is signed Monday and Section 2 is done by Thursday, March 4. The W-4 is collected Monday. The new-hire report is due by March 21. Because Texas regulates pest control, the company also owes the apprentice registration with the Texas Department of Agriculture within 10 days of employment, so by March 11. That is four deadlines in the first three weeks, all set by the start date.
Pest control adds its own clocks in other states too. In West Virginia, a new employee who is not a certified applicator but will apply pesticides must finish an approved Registered Technician training program within 30 days of hire.
Mistakes owners make with a first hire
Paying the first person as a contractor “until it works out.” If you set the hours, the route and the methods, the IRS control test points to an employee from day one. Utah, for instance, treats every worker as an employee for unemployment insurance unless the company shows the person is independently established and free from its control.
Doing the I-9 at the end of the first week. Section 1 is a day-one item. The three-day window is for your half.
Assuming the payroll service handles everything. A payroll service may run withholding and the new-hire report. Ask in writing what else it covers; unless the contract says so, the I-9, the posters and workers’ compensation are still yours.
Copying an offer letter from a friend’s company in another state. Pay timing, final pay and leave rules differ by state, and a letter that promises something your state treats as binding can bind you.
A first-week checklist
- Before day one: EIN, state withholding account, state unemployment account, workers’ compensation confirmed, posters up, offer letter signed.
- Day one: I-9 Section 1, W-4 and any state withholding form, direct deposit form, emergency contact, handbook or policy acknowledgment.
- By day three (business days): I-9 Section 2 completed with the original documents in front of you.
- By your state’s deadline: the new-hire report filed, or written confirmation that your payroll service filed it.
- Before the first payday: hours tracked in a system, not a text thread, and the pay rate in payroll matching the offer letter.
If you have a few employees already and are not sure all of this was done, the fix is usually catch-up work, not a crisis. Our guide to employee handbooks covers what to put in writing next.
Onboarding and offboarding support, federal and state compliance templates and an HR audit are part of SimplyHR’s Foundation package, which starts at $500 a month, month to month. The onboarding process is documented, put in place and handed over, so it keeps working without us in the room. If you want to see where your current setup stands, the free HR diagnostic takes about two minutes.