For any employer, the to-do list surrounding new hire paperwork can be a long and tedious one. This is especially true for small businesses who handle new employee paperwork manually. Typically beginning with a job application and ending with the election of benefits and retirement programs, there are many – often complicated – hurdles along the way.
New employee paperwork needs to be done efficiently and correctly, and usually includes:
- A Job Application
- A Signed Job Offer Letter
- A Background Check Authorization
- An Employee Identification Form
- An Employment Contract (and other legally binding documents your business may require, like a Non-Disclosure Agreement)
- An Employee Handbook Acknowledgement Form
- A Direct Deposit Form
- Required U.S. Citizenship and Immigration Services (USCIS) and Internal Revenue Service (IRS) forms, including an I-9 and a W-4
- Benefits-related forms for health insurance (medical, dental, vision) coverage, retirement programs and other optional benefits
- A Flexible Spending Account Enrollment Form
With the right planning, organization, technology, and support, this overwhelming list of new hire paperwork can be managed successfully each and every time — even for small to midsize businesses who oftentimes rely on a “jack or jill of all trades” to cover the responsibilities of onboarding new employees.
Below is a breakdown of the key stages of new employee paperwork, and tips to help streamline the entire experience for employee and employer alike.
1. Know Your Line-Up: Key New Hire Paperwork to Complete On or Before Day One
Your hiring process steps should include having new employees complete the following paperwork:
a. Job Application Form
As part of your hiring and screening process, your new employee should have completed a job application form. This form plays a critical role in helping you select the right candidate with the right qualifications for the job you are seeking to fill.
It’s important that the job application form (in addition to the interview questions that you ask) is in accordance with the law. The Society for Human Resources Management (SHRM) provides a helpful toolkit for ensuring your application form follows acceptable guidelines and current laws regarding non-discrimination and other protections.
b. Job Offer Letter
An employer will usually offer a prospective new hire a job verbally over the phone or written in an email. Alongside or immediately following, they’ll send a formal job offer letter outlining the position and core responsibilities to be held, salary and/or bonus or payment structure, start date and standard work day times, overview of benefits offered, as well as policies regarding sick and vacation days. Some offer letters introduce legal agreements solidified more deeply in a subsequent employment contract.
Generally, an offer letter is sent before a background check authorization form and states that the offer of employment is contingent upon a successful background check. Some employers, however, complete the background check ahead of time.
c. Background Check Authorization Form
As an employer, you want to be sure your new hire is who they say they are – personally and professionally. Employers may choose to require candidates to complete a background check authorization form as part of the interview process, or as a contingency for employment in the actual job offer. There are currently no Federal laws prohibiting employers from running a background check before an offer is made, though some states do not allow it and may have other restrictions as to what employers can check.
d. Employee Identification Form
This form simply gathers contact details for your new hire, including address and phone numbers, as well as emergency contacts as needed. It might also include an area to list dependents for use with insurance.
e. Employment Contract
An employment contract is meant to provide both you and your new employee with key protections and provisions related to their tenure (or following their tenure) at your company. It’s essential that you work with a licensed legal professional in developing your employment contract, and any other related agreements like a non-compete clause, confidentiality clause/non-disclosure.
f. Employee Handbook Acknowledgement Form
An Employee Handbook helps educate your employees about your company’s policies and procedures, work structure, processes, and benefits. Once your new hire has read the handbook, had the opportunity to ask questions, and signed the acknowledgement form at the end, it becomes a legally binding document between employer and employee. The employee handbook should function to help create transparency at your organization, set expectations, prevent misunderstandings, and ultimately, keep employees as happy as possible during their tenure.
g. Direct Deposit Form
Enable your employees to receive paychecks/payments from your company directly to their bank account through electronic transfer. In order to complete a direct deposit form, employees will need to provide a bank routing number and their account number.
One way to immediately simplify and streamline this initial stage of new hire paperwork is through the use of Talent Management Software, which enables employers to access expert advice, digitize the hiring and onboarding process, reduce the risk of missing critical steps and forms, and gain a secure online storage system for the safekeeping of all employee documents.
2. Give a Heads Up: Provide Advance Notice of New Employee Paperwork Expectations
a. Required forms of identification:
In order to complete and correctly file required IRS forms, your new employee must bring approved forms of identification with them to work on their first day of employment. The U. S. Citizenship and Immigration Services site has a list of acceptable documents that they can reference in preparation.
b. List of new hire paperwork to complete with corresponding deadlines
Help your new employee understand which forms that lie ahead. Provide them with a PDF file via email, or a print letter that accompanies their job offer letter outlining what they’ll be completing as part of their paperwork on day one, day two and beyond. You may even send along some forms in advance if they’d like to get a jump on filling out paperwork. And it’s always a good idea to break up long periods of filling out paperwork or hearing about benefits and policies with other training and development activities.
c. Points of contact for questions or further information
Include a list of relevant inhouse and outside contacts to your new hire for questions re: payroll and taxes, benefits, insurance, retirement programs, company policies and procedures and other Human Resources-related questions.
3. Adhere to USCIS and IRS Guidelines: Ensure All Required New Hire Tax Paperwork is Completed and Kept on File on Time
a. Form I-9 – Employment Eligibility Verification Form
The I-9 is the U.S. Citizenship and Immigration Services (USCIS) form that is used to verify your new employee’s identity and legal authorization to work. Employers have a legal obligation to verify employment eligibility for each and every employee they hire.
An employee must complete Section 1 of their I-9 by the end of their first day of work, and an employer must complete Section 2 of the I-9 within 72 hours of the time employment begins. I-9s should be kept on file at your organization and available for inspection at any time. The USCIS offers a detailed list of frequently asked questions about completing and storing I-9s for your employees.
b. Form W-4 – Employee’s Withholding Certificate
In a Form W-4, your new employee designates how much taxes they would like you, their employer, to withhold from paychecks or any other payments.
A W-4 must be completed at the time of hire and anytime the employee needs to make a change to their withholdings, including marital or dependent status. The IRS provides answers to common questions about W-4s and employer obligations on its website. Employers keep W-4s on file at their company.
Adhering to U.S. employment and tax agency guidelines can be a complex task. But utilizing HR Software to help properly track, complete and store sensitive employment documents can help eliminate costly mistakes and fines. Software also helps automate the processing of W-2 forms that get sent out each year for tax purposes.
4. Stand by Your New Hire: Offer Guidance Throughout Benefits Selection and Associated Paperwork
a. Health, Dental and Vision Insurance Paperwork
Your business may offer group health, dental or vision insurance through a private benefits provider, or may be directing employees to the Health Insurance Marketplace to obtain coverage.
Regardless of your health-related benefits offerings, act as an active resource for your employees as they complete related enrollment forms, directing them to appropriate contacts for any questions related to coverage options and costs, as well as resource areas for forms related to claims or future changes.
b. Retirement Programs Paperwork
If your business offers a retirement plan for its employees, like a 401(k), be sure to provide all necessary information to your employee about employee matching, available funds, performance, and where to go with questions about their investment before they enroll in the program and complete the required paperwork.
c. Flexible Spending Account (FSA), Health Savings Account (HSA), or Health Reimbursement Account (HRA) Paperwork
If your business offers an FSA, HSA and or HRA, explain the benefits to your new employee and provide any necessary supporting literature alongside required enrollment forms. Be sure they know where to go to obtain reimbursement or claim forms for future use.
If your company hasn’t been able to afford or offer the caliber of benefits you’d like to provide to your employees, or feels it can’t compete with the benefits packages of larger competitors, outsourcing benefits selection and management to a HR service provider such as a Professional Employer Organization (PEO) might be the right solution. What is a PEO? A PEO can help your business gain access to better benefits at more affordable prices.
Supported by the right technology, your business can not only offer great benefits, but can also manage enrollment online, integrate all benefits in one platform, as well as track utilization. Employees also gain the opportunity to access and manage their benefits securely, anytime, from any device.
Many small to midsize businesses think that only the larger employers have the budgets to streamline new hire paperwork with the help of software and other automated processes. But that’s not the case.
Outsourcing common HR tasks through the utilization of Talent Management Software, including new employee paperwork and required tax and employment forms, as well as benefits management, is an affordable option for small to midsize businesses. Not only does outsourcing ensure your business is completing and properly storing the right, new employee paperwork on time, but it also prevents costly fines and time lost attempting to go it alone.
More important, the right Talent Management Software can help your businesses facilitate a professional, streamlined, comprehensive experience for your employees. From the moment they join your company and fill out that first bundle of paperwork, through every stage of their development with your organization. And that seamless, efficient experience makes for happier, more satisfied employees, and a healthier, more productive business.
New Hire Paperwork FAQs:
What new hire paperwork am I required to have completed as an employer?
Employers must have new employees complete an I-9 and W-4. Many employers will also have their employees complete an employment contract, employee identification form, background check authorization form, direct deposit form, employee handbook acknowledgement form, and other forms related to enrollment in benefits like health insurance and retirement plans. Your company may have additional, required new employee paperwork or additional authorizations that it may need to include in the onboarding process.
Which new hire paperwork does an employer need to file with which U.S. agencies and when?
Employers aren’t required to file a new employee’s I-9 with the USCIS, but they must have the completed I-9 on file within their own record-keeping system within three business days of the date of hire (first day of work that would be paid). An employee’s I-9 must be stored for three years from the date of hire, or for one year after the date of termination. I-9s should be stored separately from an employee’s personnel file and must be made available for inspection by the Immigration and Customs Enforcement (ICE).
The W-4 must be completed and kept on file with the employer before the employee receives his/her first paycheck. Employers are not required to file W-4s with the IRS, but most keep them on record. Please note that IRS has published important information regarding changes to the 2020 W-4 form, and how this impacts employers and their employees.
Please note that employers are required to file a W-2 by January 31st for the previous year (ending December 31st) for each employee they paid wages to and withheld tax from, along with sending a copy of individual W-2s to employees by January 31st.
Where do I find information about current federal employment laws?
Visit the United State Department of Labor website for more information. You may also consult with a licensed legal professional or your Human Resources Outsourcing partner who can help keep your business informed and compliant with required Federal laws, regulations and policies.
Where do I find information about state employment laws?
Contact your state or local labor office for more information or guidance. The United States Department of Labor provides a detailed list of contact information by state for commissioners, directors and secretaries of state labor departments and their websites.
You may also consult with a licensed legal professional or a Human Resources Service Provider partner who can help keep your business informed and compliant with required state laws, regulations and policies.
How long should an employer keep employee records?
The United States Equal Employment Opportunity Commission (EEOC) requires employers to retain all personnel or employment records for at least one year. Employers must also keep all payroll records for three years. I-9s must be kept on file for three years following start date, or one year following termination. Additional requirements and recordkeeping minimums are outlined in detail on the EEOC website.
If your business is outgrowing the ability to manually manage new employee forms, automating new employee paperwork using HR software may be the right solution to ensure you are following current record-keeping laws and requirements.