Blog Hero Image
 

How to hire your first employee in Texas

Ready to add an employee to your team? Congratulations! We’ve put together what you’ll need to know to make your first hire efficiently (and legally). In Part 1, we’ll talk about how to prepare for making the hire, and in Part 2, we’ll talk about the actual hiring process (and what paperwork you’ll need for your new employee).

Quick index

Part 1: Preparing to hire your first Texas employee

Part 2: How to hire employees in Texas

Okay, let’s get started.

Part 1: Preparing to hire your first Texas employee

Getting a new employee is exciting, and you might be tempted to start advertising your new job immediately. But hold up! Before you even think about posting the job, you’ll need to get your business set up for employment. Preparing your company isn’t difficult, but you do need to stay organized to make sure you don’t miss anything important. Here’s how to approach the process:

1. Get organized and make a plan

First, get out your calendar and make a plan and timeline. Remember that it will take time to get your hiring paperwork in order, finalize your new insurance coverages, and get your business ready for an employee. Be sure to include the time it will take to find applicants, gather and sort their application materials, and do any interviews. You should also leave some time between hiring and onboarding—your new employee will need some time to make their transition.

A quick word of advice: Everything always takes longer than you think it will. (Except for getting workers’ comp, which could take much less time than you think.) So when you’ve finished calculating your projected timeline, add a week—just to be safe.

In the meantime, now is a great time to acquaint yourself with the Texas Workforce Commission website.

2. Apply for your Employer Identification Number

Before you go any further, you’ll need to get an Employer Identification Number from the federal government. It’s often shortened to EIN, and it’s basically how the federal government will recognize your business from now on.

Don’t worry about this step—getting an EIN is simple, and if you have a few minutes, you can do it right now. Get your Employment Identification Number at the IRS website.

3. Get ready for payroll taxes

Now that you’re about to hire an employee, you and your business are subject to the Texas Unemployment Compensation Act, which means you’ll need to pass along unemployment tax payments to the state.

To do that, you’ll need to register your business with the Texas Workforce Commission. The process is free and online, and it only takes about 20 minutes to complete.

4. Prepare your employee handbook

Don’t panic—putting together an employee handbook sounds like a huge task, but it doesn’t need to be! That’s because, when you get down to first principles, an employee handbook is just a collection of written information that helps new team members understand the expectations at your business.

An employee handbook isn’t required in the State of Texas, and so it can be as short or as long as you like. Preparing 3-4 simple, clear pages of basic company rules and policies is a fantastic place to start—and will go a long way to helping your new employee feel comfortable.

Need some inspiration? (Check out this article to get some ideas of what to include on your new employee handbook. You can also Google “sample Texas employee manuals” to get more guidance.)

5. Get workers’ compensation and other employment coverages

Workers’ compensation insurance is coverage that protects your employee in case they ever get sick or hurt on the job. It’s not technically required in Texas, but just about every small business should get it anyway. (Without it, you and your business will be on the hook to pay the cost of any medical bills—or lawsuits—that happen because of a workplace injury. And that could get pretty expensive.)

If you go with Huckleberry, this step shouldn’t take too long—most businesses can get covered in about 5 minutes, because everything is online and automatic. (If you go the traditional route with another insurer, though, be sure to set aside a few weeks. The paperwork can take a while.)

Another coverage to consider: Employment Practices Liability Insurance (EPLI). It protects your business in case you’re ever sued for some kind of unfair employment practice (such as discrimination or harassment). It’s not required, but it can provide some peace of mind—especially if you don’t have an employment lawyer on retainer to take care of any legal threats.

Also, if you haven’t purchased general liability coverage or a Business Owner’s Policy—now is as good a time as any. (Most small businesses need one or the other.)

6. Prepare for payroll

Paying your employee isn’t as simple as just writing a check. You’ll need to pay your employee on a state-mandated schedule, manage all their deductions accurately, and keep excellent, long-term records of every pay-related transaction. To do all this efficiently, it’s best to set up a payroll service, such as Quickbooks, Gusto, or Paychex.

A payroll service is an extra expense, yes, but it’s pretty affordable and it will save you a lot of time and frustration. (Trust us: Don’t try to run your payroll from a spreadsheet. It’s not worth it.)

Part 2: How to hire employees in Texas

Okay, you’ve completed your preparation. Now, let’s look at the actual hiring process—step by step.

1. Write and post a job description

This is a big one. To attract the correct applicant for your business, you’ll need to do two things:

Craft your job description—carefully

Think of the job description you write as the first impression a prospective employee will have of your business. And first impressions matter—a lot.

So, make sure to describe your business in ways that your ideal applicants would be attracted to. What does your business offer that your perfect employee would want? Put those aspects of the job front and center in your job description. If you want an employee who thrives in the outdoors, highlight the opportunity to work outside in the fresh air. If your ideal employee is ambitious, mention the opportunities to learn new skills and take on leadership roles.

If you get stuck, take a look at other job descriptions in your field and ask yourself how you can distinguish your business.

Get the word out about your job

Next, do a bit of detective work to find out how applicants find jobs in your area. Many small business owners post their job online, and that’s certainly a great place to start. But don’t stop there. A little bit of creativity can go a long way toward finding the perfect applicant. Call the local colleges and technical schools to post your job at their career centers. Put job flyers where people in the ideal demographic tend to congregate.

Finally, don’t forget the old-fashioned way: word-of-mouth. Send the job description around to friends and family members to see if they know any qualified applicants. (Be careful, though: hiring someone you know personally has its own set of drawbacks.)

2. Choose and interview your top applicants

The process of interviewing and hiring could fill a book on its own, so we’ll simply offer this advice: When you’ve found a qualified applicant for the job and are considering making the hire, ask yourself whether this is a person you’ll enjoy being around. (You’ll be spending a lot of time together.)

Need a bit more guidance? We recommend this quick guide to the interview process.

3. Hire and onboard your new employee

Once you find someone amazing for the job, it’s time to fill out all the paperwork. Here’s a list of the new hire forms in Texas that your employee will need to sign.  

Next, here are all the posters you’re legally required to print and display:

4. Report your hire with the State of Texas

You’ve almost made it! The final step in this process is to report your hire. You’ll need to make the report within 20 calendar days of the hire—if you don’t, your business could get slapped with a fine.

Here’s what you’ll need to include in the report:

  • The name of your business
  • Your business address
  • Your federal tax ID number
  • Employee’s name
  • Employee’s social security number
  • Employee’s address
  • The date your employee started paid work

(For complete information on how to report new hires in Texas, visit the Texas new hire reporting laws website.)

Okay, that’s it. We hope this was helpful. Remember—while hiring your new employee may involve a lot of paperwork, getting workers’ comp doesn’t have to. In fact, you can get Huckleberry workers’ compensation online in about 5 minutes—less time than it takes to make a cup of coffee.


get covered icon

Buy business insurance online in less than 5 minutes.

No paperwork. Instant coverage.
No-commitment quote.

Related Blog Posts

Disclaimer

All content on this page is for general informational purposes only and does not apply to any specific case, is not legal, tax or insurance advice and should not be relied upon. If you have any questions about the situation for your small business or the latest information in your state, you should contact an attorney for legal advice, an insurance agent or broker, and/or your state's labor or industry agency, board, commission or department. Please note that the information provided on this page may change at any time as a result of legislative action, court decisions or rules adopted or amended by any state or the federal government.

Share this post...