The HR Paperwork You Legally Need Before Your First Hire
TL;DR
Hiring your first W-2 employee triggers a stack of legal requirements with real deadlines attached: getting an EIN, registering for state and local payroll tax accounts, and more, roughly in that order. Here's the full checklist.
Hiring your first employee is exciting right up until you realize how much paperwork is legally required before their first day — and how much of it has actual deadlines attached. Here's what you need, in roughly the order you need it.
Get an EIN, if you don't already have one
An Employer Identification Number from the IRS is required before you can legally pay employees or file payroll taxes. If you've been operating as a sole proprietor without one, this is step zero.
Register for state and local payroll tax accounts
Most states require separate registration before you can withhold and remit state income tax and unemployment insurance. This is a different process from your EIN and varies significantly by state — don't assume the federal registration covers it.
Get workers' compensation insurance
Required in nearly every state the moment you have a W-2 employee, regardless of how few hours they work. Skipping this isn't a minor paperwork miss — it's a real liability if someone gets hurt on the job.
Have the employee complete a Form I-9
Required within 3 business days of their start date, verifying they're legally authorized to work in the US. Some states also require E-Verify. This isn't optional and has real penalties attached for non-compliance.
Have the employee complete a Form W-4
Determines federal income tax withholding from their paycheck. Needed before their first pay run, not after.
Report the new hire to your state
Most states require new-hire reporting within a short window (often 20 days) of the hire date, primarily used for child support enforcement tracking. It's a quick form, but it's easy to forget entirely.
Post required labor law notices
Federal and state law require certain workplace posters (minimum wage, workplace safety, anti-discrimination notices, and others) to be displayed where employees can see them — physically or, in some states, digitally for remote workers.
Set up your actual payroll process
Once the above is handled, you need a system to actually calculate, withhold, and pay wages and taxes correctly and on schedule. This is where most of the ongoing complexity lives, and it's worth having a real system in place before the first pay run, not scrambling to build one after.
None of this is optional, and most of it has a real deadline attached the moment someone accepts an offer. Get it lined up before their start date, not during their first week.