PAYING EMPLOYEE AND EMPLOYER TAXES

There is more to paying employees then just writing a check. Bookkeeping is involved and many employers make it easier on themselves by out-sourcing the work to a payroll service. If this is not the route you want to take, learn how to do payroll yourself.

Make a trip to the library to learn about payroll and go to your accountant for advice. There is also help available on the Internet at web pages of the government and the IRS. For helpful pamphlets look here at the Federal Consumer Information Center. Forms and publications put out by the IRS (Department of the Treasury), can be ordered online.

When ordering forms, it is wise to also order the instructions for each form. Many tax laws change each year and not knowing about a change can cost you money and even trigger an audit if a very blatant mistake is made.

You need to stay on top of federal and state employment laws. Penalties for non- compliance can be stiff, with fines of up to $10,000 for federal wage and labor violations. Here are several basic things you should know before hiring your first employee:

Minimum Wage and Overtime

As of September 1, 1997, the minimum wage to be paid to any employee is $5.15. You must also pay employees time and a half for every hour over forty hours worked in a week. The only exceptions are employers who fit Department of Labor classifications for managerial or administrative positions. Read more about Minimum Wage

Underage Workers

Workers under age 18 are restricted to "non-hazardous" jobs. Employees under age 16 are limited to the number of hours and times of day they can work. Children who work for their parents in sole proprietorships are exempt from some of these rules. Child Labor (Nonagriculture) might help you.

Occupational Safety and Health Administration

OSHA requirements for providing a safe work environment apply to even small business owners. This is in publication 617D.

Anti-discrimination Laws

It's illegal to discriminate against a potential employee because of race, sex, age, national origin or religious belief. Find the law in your State. If you have more than 15 employees, you must accommodate disabled workers under the American with Disabilities Act. To avoid problems, familiarize yourself with anti-discrimination law requirements found in publication 620D before you start interviewing.

Immigration Documentation

You must ask all employees, even those who are U.S. citizens, to prove their authority to work in the United States. Keep a completed I-9 form on file for all of your employees for a minimum of three years after they

Go To Page: 1 2