Hire your first employee the legal way

Who this checklist is for

Founders making their very first hire — the jump from "just me" to employer. It covers the legal must-dos and the practical ones, whether you're hiring full-time, part-time, or hourly.

What it takes

Expect real costs beyond the wage: payroll taxes, workers' comp insurance, and possibly payroll software. The paperwork side typically takes a few days to two weeks — employer registrations are the slow part. The hardest part is classification: getting "Employee or contractor?" wrong is the most expensive mistake on this list.

How the checklist flows

"Define the job and wage" and "Employee or contractor?" come first because everything downstream depends on them. "Register as an employer" and "Get workers' comp insurance" make you legal before day one. Then the hiring itself: "Write a job post that works," interview, and make a written offer. Finally, "Set up payroll" and "Plan the first week" turn a signed offer into a productive employee.

Mistakes that sink first-timers

• Calling someone a contractor to skip payroll taxes when they work like an employee — misclassification triggers back taxes and penalties.
• Hiring before employer registrations and workers' comp are active, then scrambling retroactively.
• Winging the first week with no plan, which is how good first hires quit in month two.

Real-world examples

• Every US employer must verify work eligibility with federal Form I-9 and collect a W-4 for tax withholding — no exceptions for tiny companies.
• Federal law requires reporting new hires to your state's new-hire registry within 20 days; several states require it sooner.
• Workers' compensation insurance is mandatory for employers in nearly every state (Texas is the well-known exception for most private employers).

From a founder's point of view

The first hire feels heavier than the tenth because you're building the machine while running it. Founders who script the first week — accounts ready, training planned, one real task assigned — keep their hires; the ones who improvise usually don't.

Your first milestone

Your employee's first payroll run completes correctly — right withholdings, right pay, on time.