Document #1 - A W-9 Form
The most important document that you need to have while hiring a new outside employee is that your payments to them need to be documented. If you pay an employee more than 600 dollars in a year then you must provide them with a Form W-9 that includes the taxpayer’s identification along with address, name and contact number. This form helps the employee to pay for his own income taxes. You can check out for an income tax withholding that may be required in your state. Check with the income tax authority of the state for further details. In this case, you can apply for a brand new pan card to help you with all the documentation process.
Document #2 - Application, Resume, or Documentation of Qualifications
Before you start hiring a person, keep a copy of the documents of his certificates, qualification with you. You can ask for these copies from the employee at the time of interview or at the time of joining the job. These documents should include the employees’ education, previous work history, people references, and additional documents showing qualifications and background. If this is a financial sector then ensure that the person is reliable.
Document #3 - A Written Contract
When you hire an employee, you should have a copy of the contract on a file basis, which is signed by both the parties. These agreements are very important which need to be put in writing. This contract is very important if a dispute arises in future. These contract includes points like
- Scope and duration of work
- Amount and timing of pay
- Who owns the work
Document #4 - A Non-compete Agreement
A non-compete agreement may be required for some companies. It restricts the capability of a former employee from owning a competing business within a certain area for a certain period of time from working with another employer
Document 5# Social Security Number
Always remember to know the employees social security number before hiring him. Keep a copy of the social security number with your company. This number should also be entered in the Form W2. You should also request your employee to show you his or her social security card. The employee may show the card if it is available with him at the moment. You can photocopy the social security card if the employee provides it. Also never accept an ITIN in place of an SSN for employee identification or for work. It is always important for a resident who is working to obtain a social security number. Also it is important to set up a payroll system that will help in paying taxes.
Any new employee who has entered your company should be registered in the company records or else the company may be caught for forgery later on.
