A Comprehensive Guide for Startups on Hiring & the Workplace

A Comprehensive Guide for Startups on Hiring & the Workplace

By: Daniel Steingold | July 31, 2016

Nearly all employers are aware of what they cannot do as an employer when hiring; for example, discriminating on the basis of race, gender, national origin, age, religion or disability.

But many employers, particularly newer ones, are unaware as to whom they legally can and cannot hire.

This post will help clarify who can legally be brought on board, along with the conditions of employment they should— and must— be provided.

Conditions of Employment

Let’s start with what must be provided to any given employee that you hire.

The federal minimum wage is $7.25 an hour. This means that no matter where you are in the U.S., you must pay your employees at least this much, spare for certain exceptions.

For example, the Fair Labor Standards Act, or FLSA, stipulates that tipped employees can be paid as little as $2.13 an hour, as long as their tips make up the difference. Certain disabled workers can also be paid less than the minimum wage, which is an exception to the rule that Goodwill has taken advantage of.

With this being said, many states and cities have set their own minimum wage standards that are far above the federal mandate.

For example, both the city of Seattle, WA and the state of California have announced plans to increase their minimum wages to $15 an hour incrementally.

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Overall, 29 U.S. states, along with Washington D.C., have minimum wages that are higher than the federal rate. Here is a recent list of the current minimum wages in each of the 50 states.

As for the future of the minimum wage, it is safe to say that it will increase soon.

During his 2015 State of the Union address, President Obama championed an increase to $12 an hour, arguing that the current minimum wage hasn’t kept up with inflation, and thus, is impossible to support a family on.

Hillary Clinton has openly advocated for a $15 an hour minimum wage, while Donald Trump recently announced he’d support a $10 an hour minimum wage.

To shift gears, Obamacare has put mandates on employers to provide health insurance to their employees.

The law requires employers with more than 50 full-time employees to provide health insurance to at least 95 percent of their employees and those employees' dependents (who can as old as age 26.)

If the employer does not comply, they will be required to pay a fee.

It is important to note that many firms can get around these requirements by hiring employees as independent contractors, or even by hiring workers through a temp agency.

On a final note, the FLSA requires that employees who work over 40 hours a week be compensated at a rate of time-and-a-half of standard hourly pay.

Once again, there are exclusions: namely, those in certain professions and independent contractors.

Who Can I Hire?

The U.S. allows all of its citizens and permanent residents to work legally anywhere in the country.

In addition, many asylum seekers and refugees are afforded the opportunity to work, along with those who have evidence of otherwise valid work authorization.

Certain holders of non-immigrant visas are able to work for an American employer under specific conditions, including those who have an H-1B, E, L, TN, or J visa.

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While there are no specific laws banning employers from hiring convicted criminals or felons in the private sector, many employers may show a bias against such individuals.

If someone falls into this category and is discriminated against, they may have legal recourse on the basis of being treated differently.

In general, individuals under the age of 14 cannot be employed in a formal capacity. Anyone under the age of 16 will have their working hours significantly limited by law.

In addition, minors (anyone under 18) cannot work in a field declared hazardous, which includes driving, excavation, and the operation of many types of power-driven equipment.

Different states have their own laws and regulations regarding employment of minors.

Legal Considerations Related to Employees

When hiring your first employee, you will be required to obtain an Employee Identification Number (EIN) from the Internal Revenue Service, or IRS.

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From here, it is important to keep certain records. For example, the IRS will expect you to keep information on employment taxes for four years from their date of applicability.

Also, a business will be expected to furnish records on wages and taxes paid, both on the state and federal level, annually.

Employers are also expected to verify the work eligibility of their prospective employees, which is based upon the factors mentioned in the previous section.

Any business that has employees will be required to post notices within the workplace as to those employees’ rights and the employer’s responsibilities. A list of the required posted notices can be found here.

Setting Up the Workplace

Once you’ve fulfilled all your legal requirements relating to employees, you’ll want to create a workplace that truly excites all of your employees when it comes to their daily work experience.

The first thing that should be considered when setting up a workplace culture is expectations. Employees will want a clear idea as far as what they are expected to do on a daily basis, along with the experiences, traits, and skills they’re expected to have for the job.

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Creating a workplace with clear expectations helps not only with employee happiness and retention, but with attracting employees who are ideal for the firm.

From here, you should strive to create a workplace in which every employee has a voice. Allowing employees to express themselves on Glassdoor or during company meetings is one way to understand what your employees believe you are doing right and wrong.

Obviously, there is little point in bringing up concerns if they won’t be addressed; the best firms take action when issues are brought up.

A strong company culture will encourage personal and professional growth on the part of its employees. Studies have found that after salary, career growth opportunities are what employees seek the most in any given job opportunity.

With the tenures of employees staying at any given job dramatically decreasing, particularly amongst younger employees, it is important to find ways to keep employees satisfied and engaged.

Strong companies have strong leaders who are able to make the best decision for the firm and its employees, regardless of what outsiders may think. They have a plan for the future that they can clearly articulate, and they don't make themselves inaccessible to their employees.

Lastly, successful companies use perks beyond pay, healthcare, and time off to engage their employees.

Some companies lean towards perks with a clear monetary value— free lunches, gym memberships, a company car, free travel— while others provide their workers with perks that can’t be as easily quantified, such as the ability to telecommute or accept new responsibilities at work.

In general, allowing employees all the autonomy that can be given helps with retention. Listening to employees, going above and beyond— and obviously, following the law— will play a huge role in the success of your company.

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