Hire Your First Employee. Rhonda Abrams

of used office furniture on websites such as Craigslist.org). What equipment, such as computers and phones, will they need? How about other supplies, uniforms, telecom or Internet services?

      

Access: When you worked alone, you didn’t have to worry about privacy and security. Now you do. One thing to consider is how much and what kind of access you’ll give your new employee to things such as your data, your facilities, and your personal items. Do you want to give your new employee a key to your office? Or will you wait a few months before entrusting them? Do you want your new administrative assistant to have access to your personal files or bank accounts, or do you want to set up password protection for such data? How will you keep private information—perhaps contracts or personal correspondence that you keep in your office—secure from others? Set some of these systems up before your new employee arrives.

      

Working hours/days: One of the first questions a prospect will ask you is “What are the working hours?” Figure out which days you want/need your new employee to work and which hours. Once again, if you work from home, do you want your employee to arrive after the kids are off to school and be gone before your spouse gets home?

      Much of what you decide about all these logistics depends on your personal comfort level and preferences. Some people feel comfortable giving an employee a key to their own home; others don’t want employees to even overhear their business phone conversations. There’s no right or wrong—just what works for you.

      Use the worksheet to jot down your thoughts about the logistics involved with hiring your employee.

worksheet: Logistics

      Use this worksheet to identify your needs and preferences in regard to each of these logistical concerns relating to hiring a new employee.

	NEEDS/PREFERENCES
Workspace
Furniture
Equipment
Supplies
Services
Storage
Telecom
Work days
Work hours
Facilities access
Data access
Other:
Other:
Other:
Other:

	Section Two: The Nitty Gritty—Employee Status, Labor Laws, Payroll and Taxes
CHAPTER 3	Understanding Employee Status
CHAPTER 4	Employment Law
CHAPTER 5	Managing Payroll and Payroll Taxes

      chapter

      3

      Understanding Employee Status

       “Always treat your employees exactly as you want them to treat your best customers.”

       —STEPHEN R COVEY

      Once you’ve decided to hire, you’ll need at least a basic understanding of the many laws affecting how you, as an employer, treat the people who work for you. In the next few chapters, you’ll learn about the basics of employment and labor law, payroll taxes, and ways to manage your payroll. But first you need to be aware of how the law deals with the day-to-day status and treatment of your employees.

Determining Your Worker’s Status

      You’re ready to hire someone, and they’re going to be your employee, right? Well, yes, but how do you classify that worker? You can hire them as an employee or independent contractor, for instance—but laws regulate your choice. As an employee, they might be covered by overtime and minimum wage laws or they might not. You might give them a contract or you might hire them in such a way that you can fire them whenever you need or want.

      All of this matters, so you need to know the basics of what determines a worker’s legal employment status. An employee’s status in the eyes of the government helps determine how much control over a worker you have, how much you have to pay them and for what, what rights they have, how much tax you have to pay, and more.

      When determining your employee’s status—in the eyes of the law, the major categories are:

      

Employee versus independent contractor

      

Exempt versus non-exempt employee

      

At-will versus contract employee

      

Full-time versus part-time employee

       Employee or Independent Contractor

      Your business is growing—or you want it to grow—so you’ve got to get help. One of the first things you’ll have to figure out is whether the person you hire will be an:

      

Employee or

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