THE JOY OF NEW HIRE PAPERWORK
You've just hired a new employee. Way to go! One of your first responsibilities is to complete the beloved required paperwork and provide certain notices to new hires. Here are some do's and don'ts to help you meet this legal obligation.
DO THIS
- Complete Form I-9. Employers must complete an I-9 form for each newly hired employee to verify that the employee is authorized to work in the United States. Complete this live and in person, on-site; not on-line and not via email.
- Complete Form W-4. All new hires must complete a W-4 to determine how much federal income tax to withhold from the employee's pay. Certain states also require a tax withholding form.
- Provide ACA Notice of Coverage. Under the Affordable Care Act (ACA), employers must provide a Notice of Coverage Option to all new hires. The purpose of the Notice is to inform employees of the availability of the Health Insurance Marketplace. This requirement applies even if the employer doesn't offer health insurance and/or the employee is not eligible for health insurance.
- Comply with state requirements. Many states and local authorities also require that employers provide specific notices to employees at the time of hire such as - state disability insurance, paid family leave, and other laws. Provide these notices in accordance with your state and local requirements. It is also good practice to inform employees of their rights upon hire under federal FMLA should your organization be eligible.
- Meet required deadlines. Most forms must be completed on the employee's first day of work, including the W-4 and Section 1 of the I-9 (Section 2 must be completed within 3 business days). You must provide the ACA Notice of Coverage Options within 14 days of a new hire's start date. To make life easy and provide new hires with all appropriate notices, on their first day of work. Make time to do this and get it out of the way.
- Meet full retention periods. I-9s must be stored for at least three years following the employee's date of hire, or for one year after he or she leaves the company, whichever is later. W-4s must be retained for at least 4 years. While there is no express requirement to retain a copy of the Notice of Coverage Options, it is a best practice to consistently include in new hire paperwork.
DON'T DO THIS
- Don't fail to withhold if the employee refuses to complete a W-4. If the employee refuses to complete a W-4, you should generally withhold as if the employee were single and claiming no withholding allowances.
- Don't send W-4s to the IRS unless otherwise directed. In the past, there was a requirement for employers to routinely send W-4s to the IRS if the employee claimed more than 10 allowances. That requirement no longer exists. However, a W-4 should be completed and available should the IRS ask.
- Don't neglect the ACA Notice even if you don't offer health coverage. All employers must provide a Notice of Coverage Options to new hires, regardless of whether the employer offers health insurance. There are two versions of the form; one for employers that offer health insurance and one for employers that do not offer health insurance.
- Don't require specific I-9 documents. The I-9 requires new hires to present documents that establish identity and work eligibility. However, you may not require the employee to present certain documents. The employee has the right to choose which documents to present, provided they are on the I-9's List of Acceptable Documents - page 9 of the I-9. Easy enough.
- Don't complete a Spanish I-9, unless you're in Puerto Rico. The federal government publishes a Spanish version of the I-9, but only employers in Puerto Rico must complete it. Other employers may use the Spanish version as a guide for Spanish-speaking employees, provided the English version is completed and retained.
- Don't keep I-9s in personnel files. It is a best practice to store all I-9 forms together in one file, separate from personnel files, since they must be produced upon request. I-9s must be presented within three days of an inspection request from an officer of the Department of Homeland Security or the U.S. Department of Labor. And they do come.
Failure to comply with new hire paperwork requirements may result in hefty, unnecessary fines as well as create disorganization and confusion during orientation.
HR STRATEGIES, LLC
410-241-3862