Five HR essentials for hiring your first employee

Executive overview

Growing a business to the point of hiring a first employee triggers immediate compliance obligations. Miss any of them and you risk fines, misclassification lawsuits, or a new hire set up to fail.

Five steps cover the full picture: get an EIN, complete two mandatory forms, classify the employee correctly, set up payroll, and establish a performance management process from day one.

Treating your first employee as non-exempt and setting up an HRIS from the start removes the two most costly early mistakes.

Getting an EIN

• An employer identification number (EIN) is a nine-digit IRS-assigned tax ID — required if you hire employees.
• Check a prior tax return or call the IRS hotline (800-829-4933) if you're unsure whether you already have one.
• Apply free on the IRS website; EIN is issued instantly with no processing delay.

Completing essential paperwork

• Form I-9 verifies identity and legal work authorization — required for every US hire.
• Employees must present either a List A document (e.g. US passport) or one document each from List B (identity) and List C (work authorization).
• Form W-4 sets federal income tax withholding; complete it on the employee's first day.
• Employers may explain withholding mechanics but cannot advise on how much to withhold.

Classifying employees correctly

• Non-exempt (hourly) workers are covered by the FLSA: minimum wage and 1.5× overtime beyond 40 hours/week apply.
• Exempt workers must earn at least $684/week ($35,568/year) and fall into one of six FLSA exemption categories.
• First hires are almost always non-exempt.
• When uncertain, default to non-exempt — under-protecting a worker is far costlier than over-protecting one.

Setting up payroll

• Three options: DIY, hire an accountant, or use a payroll service provider.
• DIY is cheapest initially but error-prone and unscalable.
• A payroll service or HRIS (e.g. BerniePortal) handles tax forms, time tracking, reporting, and automated payments.
• Starting with an HRIS is more reliable than DIY and more affordable than an accountant.

Establishing a performance management process

• A new hire underperforming is often a missing-tools problem, not a bad-hire problem.
• A culture guide covers company history, mission, norms, and compensation philosophy — more than a standard handbook.
• A 30-60-90 plan sets explicit expectations, projects, and responsibilities for the first three months.
• Weekly or bi-weekly one-on-ones let you catch struggles early and course-correct before they compound.