# 5 Key Things You Need to Know Before Hiring Your First Employee Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-08-10 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: 5 Essential Things to Know Before Hiring Your First Employee Meta Description: From paystub laws to background checks, here are crucial tips for hiring your first staff member and ensuring legal compliance with state and federal labour URL: https://financedigest.com/5-key-things-you-need-to-know-before-hiring-your-first-employeehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/graphicstock-confident-man-in-formalwear-waiting-for-his-turn-for-interviewhjsz-8y0qb-sbi-305497074-1736838031751-compressed.jpg) If you are planning to hire your first employee, it is a sign that your business is growing, which is a good thing. Hiring a new worker is a big step because it involves taking on more responsibilities and legal obligations. Additionally, it presents you with the first opportunity to delegate control of specific duties in the day-to-day running of your business. However, making that transition from self-employed to employer can feel overwhelming, and many may feel inadequate for the change. But that should not be the case for you. Here are five things you [need to know](https://www.financedigest.com/setting-up-a-business-in-the-uk-heres-what-you-need-to-know.html "Setting up a business in the UK? Here’s what you need to know.") before making that transition. ## 1\. You may be required to issue your employees with paystubs. A pay stub is typically a statement that an [employer gives to the employee](https://www.financedigest.com/why-more-companies-are-asking-new-employees-to-commence-employment-before-christmas.html "Why more companies are asking new employees to commence employment BEFORE Christmas.") itemizing wages and deductions for each pay period. Manually compiling and processing [pay stubs](https://www.financedigest.com/why-you-should-consider-using-pay-stubs.html "Why You Should Consider Using Pay Stubs") can be complicated and always has the possibility of making human errors. The good news there is a much easier, quicker, and error-free way of generating [check stubs](https://www.formpros.com/tax-forms/create-paystub/) online in just a few simple steps. While there is no federal law requiring [employers to provide employees with pay](https://www.financedigest.com/uk-employers-see-slight-fall-in-pay-awards-over-2023-xperthr.html "UK employers see slight fall in pay awards over 2023 – XpertHR") stubs, different states have different paystub laws. It is [important to know your state’s laws](https://www.financedigest.com/eu-seeks-deal-on-law-preventing-import-of-deforestation-linked-goods.html "EU seeks deal on law preventing import of deforestation-linked goods") concerning paystubs before hiring your first employee to ensure that you are compliant. ## 2\. Hiring is a costly affair. Having a new [hire means that someone will be drawing a salary from your business](https://www.financedigest.com/reasons-why-you-should-hire-a-business-broker-to-sell-your-business.html "Reasons Why You Should Hire a Business Broker to Sell Your Business") on a regular basis. This means that your new hire must be bringing in money into the [business](https://www.financedigest.com/how-to-bring-business-and-charities-together-through-events.html "How To Bring Business And Charities Together Through Events") or freeing up your time so that you can bring in more money. Without [money coming](https://www.financedigest.com/money-20-20-europe-how-far-have-we-come.html "Money 20/20 Europe – how far have we come?") in, maintaining an employee might be untenable. It is, therefore, essential to [consider the cost-benefit of hiring](https://www.financedigest.com/car-hire-for-smes-things-to-consider.html "Car hire for SMEs: Things to consider") an employee. If you feel like you could use some help but think hiring a full-time worker is a bit costly, you may want to try working with a freelancer where applicable. ## 3\. Know your local labor laws Every new employer must familiarize themselves with the two levels of labor laws; [federal labor laws](https://www.dol.gov/general/aboutdol/majorlaws) and state labor laws. While federal labor laws may apply for all states, different states may have specific labor laws that regulate minimum wages, work hours, termination notices, liability [insurance coverage](https://www.financedigest.com/types-of-insurance-coverage.html "Types of insurance coverage"), etc. If you are unsure about the federal and state labor laws, it may be best to talk to a business lawyer to [ensure](https://www.financedigest.com/how-to-ensure-your-new-business-doesnt-become-a-victim-of-covid-related-fraud.html "How to ensure your new business doesn’t become a victim of Covid-related fraud") your business is legally compliant. ## 4\. Never trust your instincts. When filling a new position, you may feel tempted to [trust your instincts](https://www.financedigest.com/trusting-your-gut-how-to-harness-the-power-of-your-business-instincts.html "Trusting your gut: how to harness the power of your business instincts") when deciding on the candidate to hire for a post. The problem with this [approach is that you may end](https://www.financedigest.com/switching-to-freelance-could-be-a-smart-finance-move-as-the-end-of-furlough-scheme-approaches.html "Switching to freelance could be a smart finance move as the end of furlough scheme approaches’") up hiring a criminal or an individual with inflated facts on their resume. That is why you need to run a background check on all potential [employees to establish their suitability before hiring](https://www.financedigest.com/lufthansa-launches-drive-to-hire-20000-employees.html "Lufthansa launches drive to hire 20,000 employees"). Background checks help confirm candidate’s information such as prior employment claims, criminal and incarceration records, credit history, driving history, drugs test, and worker compensation claim records. ## 5\. Some questions are off-limits when recruiting. To get your first hire, you must take potential [candidates through the recruiting](https://www.financedigest.com/recruitment-in-a-candidate-tight-market.html "Recruitment in a Candidate Tight Market ") process, which involves asking questions. However, you [need to know](https://www.financedigest.com/small-businesses-and-scams-what-you-need-to-know.html "Small businesses and scams: What you need to know") that there is a limit to the kind of questions you can ask. For instance, asking an applicant questions about their marital status, sexual orientation, race, or religious affiliation might sound like you are trying to discriminate against them. You also need to [avoid asking questions about an applicant’s physical or mental disabilities unless such disabilities may require special](https://www.financedigest.com/scam-special-how-to-avoid-christmas-shopping-fraud-this-year.html "Scam Special: How to Avoid Christmas Shopping Fraud this Year") attention, such as special accommodation or facilitation. Asking discriminating questions could lead to lawsuits that could [end up hurting your business](https://www.financedigest.com/how-to-prepare-your-business-for-the-end-of-the-governments-furlough-scheme.html "How to prepare your business for the end of the government’s furlough scheme"). **Brought to you by Paradigm Digital Ltd** --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---