Step 10: Responsible Business Practices
You’re starting a business! Now that you are at the last step, congratulations are in order, because you are now a business owner. You have a network of mentors, partners, and other businesses that will help you continue to grow and remain successful. You have knowledge of taxes, permits, business plans, accounting, sales, and customer service. Now, in this last crucial step, you need to make sure that you understand all of your responsibilities as a business owner. If you have employees (yourself included) then you will have to meet the labor standards, display the proper notifications, and properly account all earnings. Let’s get started!
Hiring employees and establishing a payroll structure
https://www.irs.gov/publications/p15 (IRS guide to employee taxes)
Before you post an application to hire an employee, you need a plan. You’ll need to know if you are hiring a part-time worker, a contract worker, or a full-time employee. Determine tax structures, withholdings, who will manage your human resources, how you will do accounting, and when you will pay quarterly taxes. The Small Business Administration’s website suggests a 10 step plan to establish your payroll:
- Get an Employer Identification Number (EIN)
- Find out whether you need state or local tax IDs
- Decide if you want an independent contractor or an employee
- Ensure new employees return a completed W-4 form
- Schedule pay periods to coordinate tax withholding for IRS
- Create a compensation plan for holiday, vacation, and leave
- Choose an in-house or external service for administering payroll
- Decide who will manage your payroll system
- Know which records must stay on file and for how long
- Report payroll taxes as needed on quarterly and annual basis
Employee Benefits (mandatory)
You are required, by law, to supply certain benefits to certain classes of employees. Usually contract workers will have a slightly different set of requires, but generally you must provide the following:
- Social Security taxes
- Workers’ Compensation insurance
- Disability Insurance (varies by state)
- Family Leave (varies by state)
Employee Benefits (optional)
Business owners use incentives and optional benefits to add value to an employee’s compensation package. The most common optional benefits are health insurance (requirements vary by state), retirement plans like a 401k, stock options, paid vacation, corporate discounts, and health/wellness programs. Optional benefits are useful in establishing a company culture that reflects the values of the business owner or brand.
You have established a basic employee benefits package, payroll structure, and human resource management strategy. The last step in understanding employer responsibilities is discovering applicable labor laws. You must comply with all federal, state, and local laws for hiring employees. This includes rules for disabilities, child labor, lay-offs, foreign workers, and hiring veterans. These laws can be confusing, and we suggest that you seek out your mentors for one-on-one help with this important subject.
You’ve made it! Welcome to the ranks of small business owners across the country. This is only the beginning, and the team at Up With ATL are here to help you be successful, grow your business, and find more customers. We highly suggest that you go back through each step in this guide, read it thoroughly, and take notes. There are always new laws, regulations, and trends that will emerge as you operate your business so be prepared to learn and change over time. Please contact us to share your business start up story, and we might feature your business on our website.