Hiring new employees revisited
by Dave Mount, Westaff
I wrote about hiring new employees a few years ago, but my interactions with entrepreneurs over the past few months have suggested that the topic needs to be revisited. Laws have changed and many of the pieces of information we need have changed as well. Also, this is a living topic. There will be more changes in the future — some in the very near future.
Many of the people I interact with have no employees at all, so some of this information may be elementary to some, but it is important to all.
Due to space guidelines, I am going to limit myself to laws relating to the Vermont Department of Labor and the Vermont Tax Department. I will dismiss the federal rules by saying that a booklet is available from the IRS covering all federal taxation issues.
The state of Vermont, through the Department of Labor (DOL), controls three programs that require forms to be completed by a prospective employee or require action of some type by the employer.
The very first thing a company should do is to have workers’ compensation insurance. This insurance is procured through your own broker but it is required by law, and the DOL has an active department to monitor workers’ compensation. You never want to be caught without it.
Once you are hiring employees, you will be required to post certain information in a place where employees can find the postings. Some of the posters involve harassment issues, minimum wage, workers’ compensation, and unemployment insurance. There are also federal posters. The state DOL website has the state posters available.
Within 10 days of hiring someone, the hiring must be reported to the DOL. This can also be done online through the DOL website. The purpose of this is to cross-check an employee against the child support data base. If a person is liable for child support, you will be notified and then you are liable to withhold the child support from the person’s pay. It might be a good idea to let a prospective or new employee know that you are required to do this. I have seen employees leave a company when an order is received requiring withholding of child support.
There is also a form (available on the DOL website) called Declaration of Health Care Coverage. It is an employee form that attests to health care coverage. There are clear instructions on the form.
The DOL also operates the state unemployment insurance program. You must be registered with the state under the program, and you will receive a quarterly form to complete by listing your employees by name, Social Security number, and the wages paid in the calendar quarter. The form walks you through the calculation of the tax due. It is required at the end of the month following the end of the quarter.
Finally, the DOL has responsibility for the state OSHA compliance. This department investigates industrial accidents and also conducts safety inspections of industrial sites. Its role in inspection is to help you provide a safe workplace. It has the power to order changes and to levy fines for noncompliance but the department has a “Vermont attitude,” which means that it is first there to help rather than flex its muscle. That only comes if voluntary compliance is not achieved. The inspectors will work with you to find an optimum solution to a problem, too.
Finally, there is the state Tax Department. Most employers are only concerned with the withholding of income taxes, although the department is responsible for collecting rooms and meals and state sales taxes as well. Again, there is a publication indicating the amount of tax to collect, and it is due to be paid to the state monthly or quarterly, depending on the amount. These taxes are due on the 25th of the month.
There is no special form to determine a person’s tax as the tax relies on the W-4, a federal form. •
Dave Mount is the founder of Westaff in Burlington.