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Guide To Hiring Employees In In New York

Guide To Hiring Employees In In New York

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Guide To Hiring Employees In In New York

Employer Information

Minimum Wage: The minimum wage in New York City, Long Island & Westchester is $15 per hour, while the remainder of New York State is $14.20 in 2024.

 

At-will-employment: Unless an employer provides an employment contract stating otherwise, an employee in New York can be fired without cause.

Simplify the Hiring Process

Staying on top of the required paperwork for new employees is complicated. Gusto makes it easy.

Hiring your first employee as a new business owner is both an exciting and frightening experience. Not only do you have a person relying on you to pay them so they can provide for their family while balancing the cash flow needs of your business, but there is also a lot of paperwork and laws to comply with.

Here are the 8 steps a business will need to make when hiring their first employee in New York.

Related: Guide to starting a business in New York

Steps To Hiring Your First Employee In New York

Step 1: Register as an Employer

Employers will need first to get a Federal Employer Identification Number (FEIN) – Form SS-4 from the Internal Revenue Service (IRS) in addition to registering as an employer with the New York Department of Labor and the Department of Taxation and Finance.

Step 2: Employee Eligibility Verification

Each new employee will need to fill out the I-9, Employment Eligibility Verification Form from U.S. Citizenship and Immigration Services. The I-9 Form is used to confirm citizenship and eligibility to work in the U.S.

The employee must complete Section 1 by their first day of work, and the employer will complete Section 2 by the end of the third business day after the employee starts.

Employers don’t submit the I-9 form but are required to keep the form on file for three years after the date of hire or one year after the employee’s termination, whichever is later.

Step 3: Employee Withholding Allowance Certificate

Each employee will provide their employer with a signed Withholding Allowance Certificate (Form W-4) on or before the date of employment. The W-4 Form determines how much federal income tax will be withheld from the employee’s paycheck.

The employer does not typically submit Form W-4 to the IRS but will keep a copy on file.

See IRS’s Publication 15 – Employer Tax Guide for more information on federal withholding.

Step 4: Submit the New Hire Reporting Form

Employers are required to meet new hire reporting requirements and report newly hired employees with the New York Department of Taxation & Finance within 20 days of the employee’s hire date.

Employee Information that will be needed on the new hire form includes the employee’s name, address, Social Security Number, date of birth, and start date, or the first day the employee begins work.

Employer Information includes Federal Employer Identification Number, employer name, address, and contact phone number.

The new hire form can be submitted online,

by mail:
New York State Department of Taxation and Finance
New Hire Notification
PO Box 15119
Albany, NY 12212-5119

or fax: 518-320-1080

The new hire information is required through the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). This information is recorded in the State Directory of New Hires and the National Directory of New Hires (NDNH) and is matched against state and federal child support databases to locate parents who owe child support.

Step 5: Set Up Payroll Taxes

After hiring employees, payroll taxes will need to be paid. Payroll taxes include:

Federal Income Tax Withholding

Employers withhold money from each employee’s paycheck to pay the employee’s federal income taxes based on the information provided in their W-4. The employer pays no part of the withholding tax but is responsible for collecting and remitting the withheld taxes.

Federal income tax withholding reports are filed using Form W-2, Wage, and Tax Statement with the IRS. Additionally, IRS Form 941 is due quarterly, and IRS Form 940 is filed annually to report any unemployment taxes due.

State Income Tax Withholding

Similar to federal income tax withholding, taxes are withheld from an employee’s paycheck for state income taxes: Use Form IT-2104, Employee’s Withholding Allowance Certificate.

Employers will use Form NYS-45 to file the Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return.

Social Security & Medicare

Social Security and Medicare taxes are paid under the Federal Insurance Contributions Act (FICA). The employer pays half of FICA, and the other half is paid from the employee’s wages.

Unemployment Insurance

Employers pay state and federal unemployment taxes based on a percentage of each employee’s salary. These taxes are known as State Unemployment Taxes (SUTA) and Federal Unemployment Taxes (FUTA).

Taking care of hiring paperwork and paying payroll is complicated and it's easy to make mistakes. Payroll services like Gusto simplify the process and ensure the federal and state reporting is up-to-date.

Step 6: Obtain Workers’ Compensation Insurance

All businesses with employees (even a single part-time employee) are required to carry workers’ compensation insurance coverage to cover medical costs if employees are injured on the job. Worker’s Compensation Insurance is administered through the New York State Workers’ Compensation Board.

Step 7: Display Labor Law Posters and Required Notices

New York businesses must display Federal and State of New York labor law posters where they can be easily viewed by employees. These posters inform employees of their rights and employer responsibilities under labor laws, such as federal minimum wage, anti-discrimination laws, and workers’ compensation rights.

New York labor law posters can be individually printed from the New York Department of Labor’s website.

Step 8: Stay Up To Date

It is important to understand the differences between employees and independent contractors. Employers will sometimes improperly classify employees as independent contractors who have different rules on payroll taxes, minimum wage, overtime, and other labor laws. An individual’s status as an employee or an independent contractor may be determined by filing IRS Form SS-8, Determination of Employee Work Status for Purposes of Federal Employment Taxes, and Income Tax Withholding.

The process of hiring your first employee in New York can feel overwhelming, and there is a lot to keep up with, but with a clear understanding of what’s required, you’re setting your business up for success. Labor laws are complex and ever-changing, so be sure to keep up-to-date with the New York State Department of Labor and the U.S. Department of Labor, and remember to seek professional advice if needed.

Guide To Hiring Employees In In New York

Guide To Hiring Employees In In New York

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