Essential Documents for Small Business Onboarding: The Complete Checklist

There’s no joy like finding the right talent and offering them a position in your company. More so in the case of small businesses where every employee makes a direct impact on its growth. But truth be told, it is only half the journey. The biggest hurdle is to retain them long-term; that’s where onboarding comes in. 

Onboarding has two main parts: the human part, where you focus on striking a great first impression, and the indispensable paperwork to ensure you remain compliant. 

When it comes to paperwork, small businesses and entrepreneurs starting anew need to familiarize themselves with the legal obligations around hiring. Many documents have to be collected, saved, and managed. Amid all the countless paperwork, the human part might get neglected. With a viable onboarding checklist, you can streamline the paperwork and focus on providing a seamless onboarding experience. This article covers all the necessary paperwork you would need before and after you hire your employees. 
 

The Legal Way to Proceed - The Initial Best Practices 

Before the new hire’s first day at work, employers must get all the prerequisites. Companies must follow all the best practices to be aligned with the law. Here are the things to do before you think of forms required when you hire new staff: 

• An EIN is Essential - You must have an employee identification number or EIN as an employer. It is likely that you got an EIN when your business was launched, but if you did not, you are better late than never. The EIN legally validates your status as an employer. To get ahead with this, you should begin with the IRS Form SS 4. 

• The Department of Labor Registration - It is impossible to initiate small business onboarding unless your small business is registered as an employer with the Department of Labor of your state. This is mandatory to pay unemployment tax and the state’s payroll. 

• Employee Insurance Compensation - Several states require that businesses have compensation insurance for their employees. Although this is waived for small businesses sometimes, it is a good idea to contact your local agency to know whether you need such a policy. This has to do with best practices in any workspace, ensuring employers’ and employees’ protection in case of mishaps on the job. 

• Running a Payroll - The employer’s responsibility is to decide how the payroll is run. Your onboarding checklist should include all the required forms and legal documents you must collect for your new hire. To enable that, you need to decide how to run your payroll. You must determine whether you will handle your payroll with an in-house team or by outsourcing payroll processes. The employer is legally responsible for running the payroll. Depending on the company and the state in which it is located, payrolls may be monthly/bi-monthly/weekly, which is also based on company policy. The laws of each region vary, and payroll management has to be aligned with these rules and regulations. 

• Contract Staff - If you are hiring contract employees, you need to obtain independent agreements, which may be filled and signed while staff onboarding occurs. It is necessary to do this as the agreements and other processes concerning employment, like taxation, will differ.

The First Day Essentials

The ideal way for employers and employees to get started with their best feet forward is to ensure they are on the same page from day one. While you are legally bound to handle the paperwork, do not miss out on other essential onboarding practices:

• Have a Handbook - Employee handbooks are helpful - to you and your employees. They spell out any company policies, and making these clear from the start is worth your while. You can find several online templates to create such a handbook. When your new employee receives their handbook, have them put their signature of acknowledgment on it, this being an assurance that they have grasped the essentials of company procedures and policies. Have employees sign the handbook acknowledging that they will abide by the company’s best practices and rules. 

• Employment details- Onboarding cannot occur if employers don’t roll their sleeves up and do some prior work, especially for small businesses. Additionally, there are a few crucial forms that employees have to fill out when they start a new position. IRS and government mandate that employers have these ready for the new employee to fill in on day one, or even before that:

  • Acceptance of the offer: A hard copy of the offer letter to employees can be handed over on the first day of work (an email may have been sent previously). An acknowledgment of this will have to be signed by the employee. The offer letter clearly describes the job role, salary offer, and any benefits. Some companies have a separate “acceptance of offer letter'' may have to be signed by employees (this may be done according to different policies of organizations). 
  • I-9 Eligibility Form - This employment eligibility form needs to be completed for every fresh employee. The employer must instruct employees to get their valid proof of identification for filling such forms. For three years from the date of employment, these forms need to be retained in individual files, and not along with other files of a personnel nature. 
  • W-4 Tax Form - Such a form gives out information about the federal and state tax amount that has to be withheld from any employee’s salary. Employers should note that employees cannot choose the amount of allowances on this form. 
  • W-9 Form - If you are hiring any contractual workers in your business, your small business onboarding checklist has to include this form. This is necessary so that employers can file and submit the 1099-NEC in the month of January. This form is tailor-made for contractual employees and the tax laws surrounding this kind of work.
  • A Non-Disclosure Agreement (NDA): The employee will be asked to sign a non-disclosure agreement, or an NDA, in order to safeguard certain confidential information regarding the new company that the employee has started working for. 
  • Some important paperwork may be a part of the handbook, but can also be given to employees as individual documents, such as a medical insurance policy, retirement benefits and other benefits. 
  • Information Sheets: A small business onboarding checklist is essential to get your new staff to fill out relevant forms of hiring, but before you do this, you can have new staff fill in an emergency contact details sheet. This is vital in the event employers need it. 

• Employee Tools - Your employees may require devices and tools from their first day on the job - these could be laptops, certain software, hardware, etc. It is in your and the employee’s best interests if these are up and ready from the start. A week before a new employee joins your organisation, your IT team should get everything prepared. 

• Talk to New Staff - A good way to begin your relationship with a new employee is to talk about policies of your company, dress codes, regarding things like leave, violation repercussions, and other rules such as your policies in terms of social media. Before you do this, make sure you have your own policies clear. This is a good time for new staff to raise their doubts and get answers from the horse’s mouth, so to speak, even if this information is provided in the handbook. 

• Conduct an Orientation - As an employer, you can conduct an orientation or make this specific to benefits that your new employees are entitled to. If your business offers insurance, commuter benefits, and the like, employees may have to fill out forms for the same and sign up. If employees decline benefits, you should have forms on record stating this.

Get It Right

Considering that the average employer in the US spends close to $4,000 and almost a month to hire a new employee, the onboarding process has to be convenient and compliant. If you are starting a small business, and have a minimal amount of staff,  you need to be prepared from the word “go”. An onboarding checklist paves the way for your smooth employee onboarding process. You benefit, as an employer, when your new staff is happy right from the first day on the job which is essential to retain them for the long term, particularly for small businesses.