Before a new hire can begin work and receive a paycheck, there are a number of new employee forms that must be completed before their first day of work.
If you’re running a small business and this is your first time getting the paperwork together after deciding to hire a new employee, the process can be confusing, and you may not be sure you’ve covered all the bases. So what forms and documents are needed?
What is new employee paperwork?
Before your employee can begin working, they must complete new hire paperwork. Some documents are required by law, such as income tax withholding forms and employment verification, while other documents might be specific to your business, like a job description, compensation agreement, insurance applications, and an employee handbook.
Here’s our guide to ensure you have all the documents you’ll need for each employee to avoid making any mistakes that could cost you fines, interest, and penalties.
Suggested reading: How to Hire Employees: 11 Tips for a Great Hiring Process
Required state and federal forms
The federal government wants to make sure your new employee is eligible to work in the United States and that they are paying taxes. These two forms are required:
IRS Form I-9 is required to verify the identity and eligibility of an individual hired for employment. Employers must complete a Form I-9 for each worker within three days of their start date. These forms are completed by the employer and employee for both citizens and noncitizens.
The employee must present original documents that prove their identity and employment status.
Examples of acceptable documents include:
- U.S. passport
- state driver’s license
- state identification card
- Social Security card
If the employee doesn’t have a Social Security number (SSN), they’ll need to file this form with the Social Security Administration. As the employer, you’ll need each employee’s SSN to complete the annual Form W-2 for reporting income and taxes withheld.
The employer must examine the documents and determine if they reasonably appear genuine. You’re not expected to be a forensic scientist, but you should be comfortable the documents are valid. You can find a complete list of acceptable documents for employment eligibility verification on this government site.
The government has an online system, known as E-Verify, that employers can use to check and confirm an individual’s eligibility to work in the U.S. This system compares information provided by the employee on their I-9 with databases with the Department of Homeland Security and the Social Security Administration.
Although using the E-Verify system is mostly voluntary, some states do require that employers use this verification system and not just rely on a brief examination of the employee’s document. So be sure to check with the laws in your state.
Form I-9s are not submitted to the government but must be retained by the employer for three years after the date the worker is hired or one year after employment is terminated.
IRS Form W-4, also known as the Employee’s Withholding Certificate, is used along with IRS Publication 15 to determine the amount of federal income tax to deduct from the employee’s paycheck. The tax deduction is based on the employee’s filing status and claimed number of exemptions. Your employee will need to fill out the form with their Social Security number, marital status, and any other tax withholding adjustments.
You don’t need to submit any Form W-4s to a government agency. However, you do need to keep them in each employee’s personnel file and submit the information to whoever handles your payroll processing. They’ll need this data to calculate the amount of withholding taxes.
If you’re employing independent contractors, you’ll need to use Form W-9.
Helpful resource: The Top 5 Payroll Solutions for Small Businesses
State tax W-4
Withholding forms are required for those states that impose individual income taxes. Unless your business is located in one of these nine states with no income tax, you’ll also need to complete a state Form W-4 in addition to the federal Form W-4.
Part of achieving a smooth new employee onboarding experience is having all required documentation available and ready to go. Here’s a list of new employee forms that are not legally required but you may want to have for your business.
Direct deposit form
The days of printing and passing out physical checks are gone. Now, employers can deposit their workers’ paychecks directly into their bank checking or savings accounts.
The employee fills out a direct deposit form that authorizes their employer to deposit funds into their bank account. You may want to request a voided check to verify the information, such as the bank routing number and the employee’s bank account number.
A job offer letter puts the job’s specifics in writing to clarify the conditions of employment and avoid any misunderstandings in the future. It usually contains details including the job description, salary, bonuses, start date, hours, benefits and other conditions of employment, such as any required background or reference checks.
Depending on the nature of the job, you may want or be required by law to complete a background check on your prospective employee. While fields like finance, healthcare, and education often require a background check, they’re not needed in every profession.
In any case, an applicant can always opt-out of a background check, but this decision may negatively affect their chances for employment.
An employment agreement is more detailed than an offer letter. It contains specific information about the employee’s job and each party’s obligations.
Not all jobs require an employment contract, but if applicable, here’s what you need to include:
- Information about the job with title and department
- Expected length of employment
- Schedule of working hours
- Employee responsibilities
- Compensation and benefits
- Conditions that could lead to termination
Companies improve and grow by training their employees and sharing proprietary methods and trade secrets. Business owners can protect this investment in their workers by having newly hired employees sign a non-compete agreement before beginning their jobs.
A non-compete agreement prohibits an employee from working for a competitor or starting a new competing business for a specified period after employment is terminated.
All employers should have an employee handbook that describes the company’s policies and procedures. An employee handbook is a legally binding document for both the employer and employees and can be a resource to resolve disputes and misunderstandings and avoid lawsuits. Each new employee should receive a copy and verify by signing that they have read the manual and understand it.
Employee handbooks can include information about eligibility for employee benefits, performance evaluations, stock option plans, and drug/alcohol tests.
New hire questionnaire
Some employers use new hire questionnaires to get to know their employees better. Questionnaires may ask about the employee’s work ethics, personal job preferences, hobbies, past achievements, strengths, and goals.
The information from these surveys can help make the onboarding process smoother for employers and employees alike. If you need help getting started, check out this template for your new hire questionnaire from the HR professionals at Eddy.
If your business has sensitive or private data, you may want to have a new employee sign a non-disclosure agreement (NDA) to protect this information.
If the new position is for a clerk in a retail store, an NDA might not be necessary. However, if the new employee will have access to private customer data or trade secrets, you might want to consider having them sign an NDA.
Emergency contact information
You should have every new employee complete a form with their emergency contact information, including the contact’s name, relationship to the employee, and contact information. This information should be stored in the employee’s personnel file.
If your company offers employee benefits, there may be certain forms that your new employee must fill out and sign. These may include documentation for health insurance, life insurance, disability insurance, and retirement plans.
In some cases, an employee must sign a document indicating that they either accept the benefit or decline to participate in the programs.
Helpful resource: An Employer’s Guide to Small Employee Benefits
Employee provided documents
New employees must be able to provide documents that verify their identity and validate their employment eligibility. Examples could include their U.S. passport, driver’s license, voter registration card, state identification card, or Social Security card.
Social Security card
You’ll need to see a new hire’s Social Security card in order to complete a W-2 for recording and reporting their payroll.
If they don’t have a Social Security number, they’ll need to contact the Social Security Administration and make an application for a new one. A passport with a Social Security card is sufficient to prove identity.
Helpful resource: A Simple Breakdown of the W-2 and W-4
You can use a birth certificate as one form of identification, but you’ll also need another form of government-issued identification with a photograph of the individual.
Some forms of state IDs, such as a driver’s license or identity card, are acceptable to prove the identity of your new worker.
Visas and green cards
Immigrants in the United States who don’t have a valid state ID will need to present a work visa or green card that proves their eligibility to work.
Streamline your onboarding process
Hiring new employees is a necessary part of growing your business. That’s why starting the onboarding process on the right foot with the appropriate documentation and completed forms is a good idea.