Hiring Employees in SoCal? 5 Documents Business Owners Need
A hiring boom is taking hold in SoCal as businesses rapidly begin reopening in the wake of the COVID-19 pandemic. As you begin bringing new employees on board, be sure to remember that each time you hire an employee, you commit to following all California and federal employment laws. To make sure that you’re remaining compliant when bringing on a new hire, you’ll want to have these five documents on hand for signatures and to keep for your records.
- Tax & Government Forms (California and State)
When hiring a new employee in Southern California, you’ll need to have the proper tax forms available. Your new employee, whether they are an independent contractor or W-2 employee will need to provide you with their preferred tax withholding status (W-4) or fill out a W-9.
Confirm that you have properly classified your employee, as AB-5, which went into effect in California in January 2020 and AB 2257 (which later revised AB-5) significantly changed the employee classification parameters throughout SoCal. If you’re unsure of how to classify a new employee, consult an attorney.
Likewise, you’ll need to secure an I-9 to confirm that your new employee is authorized to work in the United States. All tax and government forms should be signed and kept on file for your records.
- Employment Contract/Contractor Contract
Although many businesses don’t have a formal employment contract, that doesn’t mean you should go without one. An employment contract is an agreement between you, as the business owner, and your new employee. An employment contract sets forth the nature of the relationship between employer and employee.
If you’re bringing on a contractor, you should also have independent contractor contracts available for signature. An independent contractor contract also sets forth the terms of the engagement. Be sure to keep a signed copy in your records.
- NDAs (Non-Disclosure Agreements)
Many businesses in Southern California benefit from having employees sign Non-Disclosure Agreements. NDAs are safeguards that protect private information such as intellectual property, from being shared with competitors. It is common for employers to require NDAs from both employees and independent contractors.
- Applications, Resumes, CVs
Keep all applications and resumes from contractors and employees you hire. In the event of a dispute during employment, having the original application, resume, or CV on file may help protect you as an employer.
- Employee Handbook
All employees need to receive an employee handbook, which means as a business owner, you need to create an employee handbook, before hiring. Although California law does not require the distribution of an employee handbook, the Fair Employment and Housing Act (FEHA) does require that businesses that employ five or more employees distribute harassment, discrimination, and retaliation and prevention policies in writing.
As a business owner, you must comply with the FEHA act, to protect yourself in the event of litigation. Including these policies along with other policies and company organizations in an employee handbook is an even better safeguard.
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