I am bring on two new employees, one of which is an intern. I had no idea how to do payroll or non disclosure forms. Is there anyone out there that have examples or provide me with other ideas to take into considerations. The attorney wants to charge too much money for them to draw it up, so I figured I can do one myself.
I bet the internet will have sample forms. Not sure about the payroll though!
For payroll, I would check with your accountant.
As far as the other, I'd probably go with the attorney. You want to make sure it is done correctly.
Why do one yourself, when you can get it here for free! (I'll PM it to you.)
Keep in mind that different states may have a different timeframe that it can be enforced for, so you may want to have your attorney look it over for approval within your state.
It's three pages long for my layout, remember to add page numbers for your layout.
Don't forget worker's comp coverage for your employees.
If you only have one paid employee, QuickBooks has a free payroll module...you have to pay for any more than one employee though.
For any new employee, you will need an I-9 (employee completes top portion on day 1 of employment and you must see either a list A OR a list B AND C item, and certify the form by day 3. This form must be completed in full, in blue or black ink, and retained for 1 year after termination, or 3 years after hire, whichever is later.
http://www.uscis.gov/files/form/i-9.pdf
You also need a W-4 http://www.irs.gov/pub/irs-pdf/fw4.pdf. In addition, your state may require it's own withholding form.
I suggest contacting your accountant ASAP regarding how to properly process payroll, quarterly and annual reporting, W-2s, maintenance of payroll records, etc.
And contact your insurance agent ASAP about workers' compensation coverage for you employees. You are required to have this in almost every state.
We also have a form we have to fill out and send to the state when we hire a new employee.
Plus you have to deal with paying the IRS their share.
Don't forget worker's comp coverage for your employees.
If you only have one paid employee, QuickBooks has a free payroll module...you have to pay for any more than one employee though.
Our state only makes you get workers comp if you have more then 3 employees..so do check into it, it AINT cheap and it would be shame if you get it and dont need it..
If your state doesn't require you to have workers' comp insurance until a certain number of employees and you opt not to obtain this insurance you need to let your employees know this prior to hiring them. It could change whether they want to work for you or not. It would be very shady not to inform them that you have chosen not to purchase workers' comp as it is not yet required by law based on your number of employees.
If your state doesn't require you to have workers' comp insurance until a certain number of employees and you opt not to obtain this insurance you need to let your employees know this prior to hiring them. It could change whether they want to work for you or not. It would be very shady not to inform them that you have chosen not to purchase workers' comp as it is not yet required by law based on your number of employees.
Agreed, definitely be up-front about this. If they found out there's no workers comp after an injury, they would be more likely to go after you for pain and suffering, which can be several times compensatory damages (they don't have that option under WC).
Even if they don't win the suit, the attorney fees alone would probably be the equivalent of several years worth of WC premiums. A judgment against you could potentially wipe out your entire business (and your personal assets if you don't have an LLC). We pay $500/year for our WC coverage.
Call you lorcal Chamber of Commerce and see if they have any one who could "advise" you about some of the issues. In some areas, there are retired executives that will volunteer their time or charge a lower fee. Also, see if there is a SCORE (Service Corps of Retired Executives) in your area. www.score.org
I used Quickbooks for my businesses and didn't find it that difficult to do my own payroll taxes until my business grew and I hired an office manager.
I'm in MD also, and I can tell you that you definitely need Workers Compensation Insurance and Unemployment Insurance. And neither one of them is cheap. Make sure you register your employees with the state at dllr.md.state.gov
As for payroll, go through your banking institution. Most large banks offer some type of easy online payroll processing and track your information and let you know when taxes and such are due.
Your local state tax dept and local IRS office will help you for free. You can 1099 your help which is much easier, but a whole different set of rules. And if you don't follow the rules, the IRS holds you responsible for their taxes and you cannot collect from the worker. You still need workers comp, but may not need unemployment.
Be careful about "1099" an employee. There are lots of rules and if you are caught, you will be resposible for all the back taxes plus a penalty. 1099 means the person is an independent contractor - some of rules mean you can't tell them when to come to work and how long they work, they so similar work for others, etc. I only used Physical Therapists as 1099 in my therapy business because they were truly independent contractors. I never used it for my coffee shop employees. It was never worth the risk. It was hard enough paying payroll taxes on time - I didn't need the extra stress.
1099's can't be used for hourly employees, but can be used for help at busy times and delivery. It suits my business. You have to have people on hand who want the work when you need them. My daughters work for me on a 1099 when THEY are able. Also my delivery system is set up to be done solely by independent contractors who get my entire delivery charges.
Again, I suggest that you talk with professionals - either through an organization such as Chamber of Commerce or SCORE and with the IRS before determining how you are going to handle employees or independent contractors. You can also go to the IRS website and read information there. Even if others with similar businesses use "independent contractors," you are the one who will ultimately be resposible for penalties if you are audited by the IRS.
Again, I'll pull my Human Resources card here. This is my day job.
There is little to nothing you'll be able to legally do a 1099 for in a bakery. In order to be considered an independent contractor, they have to have flexibility in setting their hours, be directly responsible for profit OR loss to themselves, and be responsible for the direction of their work, not just taking cues from the company (i.e. take these cakes here is a direction of the company). And that's just the beginning of the IRS independent contractor rules. If you're using 1099s, you're towing the line.
The independent contractor works for me. I am not going to get into the details of my company, as it is different from any I have seen on this site. I do meet every criteria for hiring independents in my business. One of my majors was accounting and I have owned three businesses in the past, all with independent contractors, and some hourly employees, depending on the job. I am a fanatic for following the law, as my posts usually reflect this. I probably shouldn't have brought this up because the requirements are strict. Close contact with the IRS, state tax dept, unemployment, and workers comp are a must. And as I posted originally, if there is a mistake, all tax liabliity and penalties lie with the business owner with no ability to collect from the recipient.
The independent contractor works for me. I am not going to get into the details of my company, as it is different from any I have seen on this site. I do meet every criteria for hiring independents in my business. One of my majors was accounting and I have owned three businesses in the past, all with independent contractors, and some hourly employees, depending on the job. I am a fanatic for following the law, as my posts usually reflect this. I probably shouldn't have brought this up because the requirements are strict. Close contact with the IRS, state tax dept, unemployment, and workers comp are a must. And as I posted originally, if there is a mistake, all tax liabliity and penalties lie with the business owner with no ability to collect from the recipient.
Though it may have been lawful in the past, the rules changed in the last couple of years. If you haven't updated yourself on it, I recommend you do it now.
Again, my business is not structured like anything I have ever seen on CC. My business fits every single criteria. I actually created the structure so that I could use this setup. Recently, a business person got into trouble with the IRS and they had to look at my books to see his transactions with me. Most of my sales were cash with him and I recorded every penny. They found part of his tax fraud in my books and I didn't really even know him. While deep in my accounting books, the IRS fraud division confirmed that my accounting and classification of employees/contractors were correct... straight from the feds.
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