Every business that hires an employee in California has to write up an official record on the hire and tell the worker their rights. Workers hired in California do not escape the attention of the Employment Development Department and the Franchise Tax Board.

The records help the employer fulfill the contract with the worker. Payroll deductions for tax and insurance start without a delay.

1. Get a federal Employer Identification Number (EIN).

A business, before hiring any employees, has to make the business stand out from all the other businesses in America. An owner can request the 9 digit number from the Internal Revenue Service by using a form, Application for Employer Identification Number, or applying online at www.irs.gov.

The identification number is used to identify the taxpayer when they file a tax return and correspond with the IRS and Social Security Administration.

Employers can not hire employees without their identification numbers.

2. Get a State Employer Identification Number (SEIN).

A federal number is not enough to start in California. There is also an eight digit state account number called, the State Employer Identification Number or SEIN. File a Registration Form with the EDD.

The business then has a payroll account.

If an employer waits to get a SEIN until after hiring an employee, the form has to get filed within 15 days.

3. Request any licenses or registrations from California.

Some employers have to get a license or a registration from the Department of Labor Standards Enforcement before hiring an employee. Employers needing official approvals include farm labor contractors, garment manufacturers, talent agents, employers of industrial homeworkers, sheltered workers, studio teachers, and car washers.

4. Make the worker an official employee.

Officials in California have to know the worker is there at work at the business. The first thing an employer has to do after paying a worker more than $100 in a quarter is register the worker with the EDD. The employee is enrolled on a state registry.

Send in a form, the Report of New Employees, to the EDD within 20 days. Or, use the e-Services for Business to register the employee online.

5. Inform the worker on insurance.

Protecting workers against financial hardships that happen when earnings stop at the end of a career or an injury or illness piles up bills is done by making all the needed payroll deductions. Tell workers about the insurance that covers them. Let them know the money comes out of their paycheck.

A set of information is sent to the employer after the employer registers with the Employment Development Department, including the Report of New Employees Form and a California Employer's Guide. The informational publications that are given to employees are Notice to Employees (on copies of the federal W-4 or state DE-4), California Program for the Unemployed, Paid Family Leave, and Disability Insurance Provisions.

And, the employer gets blank deposit coupons for insurance accounts.

Make sure to remember to tell employees about workers' compensation insurance. All California employers have to either pay into the state insurance system or set up a private workers compensation insurance fund for their workers.

6. Tell the worker their rights.

Workers have a whole set of rights in California. Tell them about these rights during the early days of work when the employee is just beginning to learn their work. The Department of Labor Standards protects the rights.

There are seven basic rights that guarantee work will not fall short of what a Californian expects.

• get paid the minimum wage
• a 10 minute rest break
• a meal break
• all the tools necessary to do the work
• get paid every time the employers asks a worker to report to work
• a pay stub or wage statement every time wages are paid
• a workers compensation claim when injured on the job

7. Post notices.

California asks employers to decorate a wall with a Notice to Employees posting to inform an employee wage credits are on records filed by their employer on their unemployment insurance, disability insurance, and paid family leave.

There is also a posting on their wage rights and other basic rights called, In California Workers Have Rights.

An Official Employee

The accurate work records are kept to make sure the employee gets all the money coming to them. Writing up the official records is more important than even filling out a 1099 form and getting a W-2 for an employee.

Sources:

Governor Edmund J. Brown, Before the First Time Employee Starts Work (January 2011).

IRS, Understanding Your EIN (2011).

Employment Development Department, California Employer's Guide 2011 (January 2011).

Department of Labor Standards Enforcement, In California Workers Have Rights (revised 2007).