New Employee Forms: Ultimate Guide for Small Businesses

New employee forms set the foundation of an employee’s first few days on the job. You’ll need to have them fill out federal and state government forms, internal forms, employee benefits enrollment, and employee information forms. While not every form is legally required, it’s a good idea to check this guide for the necessary forms, ensuring that your company is collecting and retaining appropriate data.

Federal & State Government Forms

Federal and state government forms serve as the bedrock of this process. These are legally required documents that ensure you remain compliant with state and federal labor laws.

Form W-4

A W-4 is a federal tax withholding form that tells you how much to withhold from an employee’s paycheck in taxes. Employees are required to complete the W-4 form before the first payroll.

Form I-9

As a federal identity verification (employment verification) form; employees are required to complete the I-9 form per the Department of Homeland Security. By the employee’s third day on the job, they must provide documentation proving that they’re legally able to work in the U.S. In most cases, a driver’s license and Social Security card (or a US passport) can be provided as documentation. Learn more about what it entails in our in-depth I-9 form guide.

W-9

The federal tax form used for independent contract employees is the W-9. It’s used to gather tax information about non-employee workers who receive payments of $600 or more in a year.

State & Local Tax Withholding Forms

Many states offer an employer website that contains all the required compliance forms you need if you employ workers in that state. However, it starts to get complicated if you have workers in multiple states with varying requirements. For example, some states have their own tax withholding forms that are different from the W-4.

In most cases, your payroll provider can supply you with the forms you need in these states. If you use HR software or work with a Professional Employer Organization (PEO), this is likely done automatically through the software. If you don’t have a payroll provider, you can find the following new employee forms and compile them yourself using the links below.

State New Hire Reporting

The state new hire reporting form is completed and sent to an individual state to document that you’ve hired a new employee. It’s used for statistical data and child support. Most states require the information be provided to the state within 20 days of hiring a new team member.

Internal New Hire Forms

These forms are an essential part of your company’s onboarding process. Depending on the nature of your business, you may not need all of these forms, or you may need different ones.

Background Check Authorization

A background check authorization form is a document that gives the employer permission to conduct a background check on a prospective employee. It should clearly state what the background check includes (such as criminal records, credit reports, or driving records) and comply with all relevant laws, including the Fair Credit Reporting Act (FCRA). The FCRA requires employers to get written consent before seeking an employee’s or potential employee’s credit report.

If you use a background check provider or HR partner, they’ll be able to provide you with a compliant form. When running a background check, you need to have the individual sign off on your ability to run a background. The form must have specific language about their rights during this process. Learn more about this process and why it’s important in our article on creating a background check policy.

Employee Handbook & Acknowledgement

The employee handbook includes many company policies and covers at-will employment. The acknowledgment form is a document each employee signs to confirm they’ve received, read, and understood the handbook. It’s crucial to have employees sign a new acknowledgment form whenever you make material changes to your handbook.

Sexual Harassment Policy

A key part of the employee handbook, a sexual harassment policy outlines what constitutes workplace sexual harassment and the steps the company will take to prevent it, handle complaints, and discipline offenders. Having a clear, well-communicated policy creates a safe environment for all employees and is a critical step in preventing harassment.

Non-discrimination Policy

A non-discrimination policy is another important component of your employee handbook. This policy affirms your company’s commitment to providing equal opportunities and a fair workplace for everyone, regardless of race, gender, age, disability, religion, or any other protected characteristic.

Nondisclosure Agreement

Generally included in the handbook, a nondisclosure agreement (NDA) is a legal contract between an employer and employee which seeks to protect any confidential and proprietary information related to the business. This could include trade secrets, customer lists, marketing strategies, and more. Employees are typically asked to sign an NDA as a condition of their employment.

Noncompete Agreement

Historically also part of the employee handbook, a noncompete agreement is a contract where an employee agrees not to compete with the employer during and after their employment. This may include starting a similar business or working for a direct competitor.

To be compliant, these agreements must be reasonable in scope, geography, and duration. Some states have restricted the use of noncompete agreements, so it’s best to check with your business attorney before having employees sign them.

Moonlighting Policy

A moonlighting policy is a set of guidelines outlined by an employer that dictate the terms under which employees can engage in work outside their primary job. It doesn’t necessarily prohibit secondary employment; instead, it sets certain conditions to manage potential conflicts of interest, overwork, and productivity issues.

Offer Letter & Employment Agreement

The offer letter and, where applicable, the employment agreement both detail the terms of the employment relationship, including roles and responsibilities, compensation, benefits, and termination conditions. The offer letter is usually a simpler document, while an employment agreement is more detailed and formalized, generally used for hiring high-level executives or in industries where the terms of employment are complex and need to be clearly defined. They’re also used when the employment is not at-will.

Employee Benefit Enrollment Forms

Every organization has a slightly different benefits package. Your company may not need all the benefit forms listed below, or you may have more, like a tuition reimbursement program, stock options, or wellness programs. Always ensure your employees fully understand each benefit and how to enroll. These forms will be provided to you by your benefits administrator.

1. Health Insurance: This is one of the most common benefits offered by employers, and it requires employees to fill out an enrollment form to choose their coverage level and dependents.
2. Dental Insurance: Like health insurance, dental insurance also typically requires an enrollment form.
3. Vision Insurance: Employees who wish to take advantage of employer-provided vision insurance will need to complete an enrollment form.
4. Retirement Plans like 401(k), 403(b), etc.: If your company offers a retirement plan, employees will need to complete an enrollment form to start contributing and to choose their investment strategy.
5. Life Insurance: Employers offering life insurance will require employees to fill out an enrollment form, often detailing things like beneficiaries.
6. Disability Insurance: Disability insurance (both short term and long term) typically requires an enrollment form.
7. Flexible Spending Account (FSA) or Health Savings Account (HSA): If these accounts are offered, employees will need to decide how much money to contribute pretax and complete an enrollment form.
8. Employee Assistance Programs: These programs offer resources for personal issues, like mental health resources, and may require an enrollment form.

Employee Information Forms

Employee information forms collect vital details about your new hires that can be crucial for payroll, communication, and emergency situations. It’s a good idea to request employees update these forms annually to confirm they’re still accurate.

Direct Deposit Form

Direct deposit is the default method of paying employees today. The direct deposit form can be used, or your employee can get one from their bank. This form authorizes your business or payroll provider to deposit an employee’s paycheck directly into their bank account. Learn how to set up direct deposit for your employees in our guide.

New Employee Information

The new employee information form captures personal details and information about your new employee. This includes information like their address and phone number. Importantly, it also includes emergency contact information so you know who to call in the case of an emergency with this employee.

When to Complete the Forms

How to Store Forms

All these documents must be stored securely to protect the employee’s personal information. This can be done physically in a secure location, digitally in a protected database, or a combination of both. It’s important to follow best practices for data protection, including limiting access to this information to only those who need it and using secure, encrypted systems for digital storage.

I-9 forms have specific requirements for storage. Employers must retain Form I-9 for three years after the date of hire or one year after the date employment ends—whichever is later. These can be stored on-site or off-site and can be stored digitally, but they must be kept separate from all other employee documents. If an employer is audited, they must be able to present these forms for inspection.

For forms containing confidential or private information, such as Social Security numbers or bank account details, extra precautions should be taken. This could include storing these forms in a locked, secure location or using encrypted digital storage.

Remember, every business has a responsibility to protect its employees’ personal information. Always stay up-to-date with data protection laws and regulations, and seek legal advice if you’re unsure about how to store these documents properly.

Why New Hire Forms are Necessary & Cost

New hire forms are essential for several reasons:

• Legal Compliance: Certain forms like Form I-9 and Form W-4 are required by law. Form I-9 verifies an employee’s eligibility to work in the United States, while Form W-4 is used to determine the amount of federal income tax to withhold from an employee’s paycheck.
• Employee Information: Forms like emergency contact and direct deposit forms collect important information about employees. This information helps employers handle emergencies effectively and ensure that employees are paid correctly and on time.
• Setting Expectations: Documents such as the offer letter, employment agreement, and employee handbook set clear expectations about the job role, responsibilities, compensation, company policies, and more. This helps prevent misunderstandings and disputes.
• Protecting Business Interests: Contracts like nondisclosure agreements (NDAs) and noncompete agreements protect a company’s confidential information and business interests.
• Promoting a Safe and Respectful Workplace: Policies on sexual harassment and non-discrimination help create a safe and respectful working environment. They make it clear what behavior is unacceptable and the consequences of violating these policies.

You have a great deal of control over the cost of your new hire forms. Where possible, we’ve provided forms you can use and highly recommend you have your lawyer review them first. You have several options, the first one being the least expensive:

1. Doing it In-house: If you choose to handle the process internally, your primary costs will be time and labor. You’ll need to invest in creating, organizing, storing, and managing these documents. You may also need to spend on training your HR staff to handle these tasks effectively.
2. HR Software: HR software platforms can automate many of these tasks, reducing the time and labor required. Costs for HR software can vary widely based on the features and number of employees. Some platforms charge a flat monthly fee, while others charge per employee. Costs can range from $20 per month to several hundred dollars per month.
3. Hiring a Lawyer: If you choose to hire a lawyer to create custom documents, the costs can be significant. According to the American Bar Association, attorneys’ fees can range from $150 to $1,000 per hour, depending on their experience and location.
4. Online Legal Services: Online legal services can be a more affordable alternative for creating custom documents. These platforms often offer document templates that you can customize for your business. Prices can range from about $20 for a single document to several hundred dollars for a bundle of documents or ongoing services.
5. HR Consultant: Partnering with an HR professional can be slightly more expensive, but you get someone who can create custom forms for your company and who can provide you insight into your process. HR consultant fees vary, and some will do flat-rate work or charge per document, but generally, you can expect to pay an hourly rate of $85 to $200 per hour. If the HR consultant is a lawyer, expect to pay on the higher end.

Best Practices for New Employee Forms

Handling new employee forms requires some advance planning. Here are some best practices to help you stay on top of this process and remain organized, setting a good first impression for your new employees.

1. Incorporate Form Filling into the Onboarding Process: Make form filling a part of your onboarding checklist and schedule time for it during the first day or week of employment. This ensures all necessary paperwork is completed promptly.
2. Provide Clear Instructions: Ensure that each form comes with clear instructions about how to complete it. If possible, have someone from HR available to answer any questions the new hire might have.
3. Use Digital Forms: Consider using digital forms instead of paper ones when possible. These are easier to fill out, store, and manage—plus, they’re environmentally friendly. Many HR software solutions offer this feature.
4. Secure Storage: Store all completed forms securely to protect your employees’ personal information. This could be in a locked filing cabinet for paper forms or a secure, encrypted digital storage system for digital forms.
5. Access Controls: Limit access to these forms to only those who need it to perform their job duties. This helps further protect your employees’ privacy.
6. Regular Audits: Conduct regular audits of your forms to ensure they’re up-to-date and compliant with current laws and regulations. This is especially important for forms like Form I-9, which have specific compliance requirements.
7. Annual Reviews: Make it a practice to review and update forms annually or whenever there are changes in laws or company policies. This includes updating W-4 forms when employees’ personal or financial situations change.
8. Communication: Keep the lines of communication open. Let your employees know why you need these forms and what you do with the information. This builds trust and helps ensure that the forms are filled out accurately and promptly.
9. Legal Advice: When in doubt, seek legal advice. Laws and regulations related to employment and data privacy can be complex and vary by jurisdiction. A legal professional can provide guidance tailored to your specific situation.

New Employee Forms Frequently Asked Questions (FAQs)

When completing the I-9 form, what are two forms of identification I can use?

How should I store new employee forms?

Can I use digital forms instead of paper forms?

How often should I review and update new employee forms?

Bottom Line

Embarking on the journey of hiring is an exciting phase for any business, but it also comes with responsibilities to ensure legal compliance. It’s crucial to correctly complete and promptly submit forms to the relevant authorities, where necessary. Maintaining a well-organized record of all signed policies and employee data is equally important. View these forms as allies to your business. They’ll keep you compliant, organized, and growth-ready.