New Hire Paperwork: Essential Guide 2024

New hire onboarding a new hire is an exciting time. You’ve decided you like each other and are willing to give things a try.

But, before things can proceed further (legally), quite of bit of new hire paperwork has to be completed by both the organization and the new employee.

Use this guide to ensure everything’s all present and correct.

What Federal And State Forms Are Required For New Hires?

Form I-9

The I-9 is required to verify the new employee's identity and eligibility to work in the United States. The employee and employer must both fill out sections of this form. 

Employers must complete a Form I-9 for each worker within three days of their start date​​​​.

Overview of Form I-9

Form I-9 is divided into three main sections:

1. Section 1: Employee Information and Attestation
2. Section 2: Employer or Authorized Representative Review and Verification
3. Section 3: Reverification and Rehire (for employers to complete when necessary)

Section 1: Employee information and attestation

• Who completes it: The employee.
• What it includes:
  • Full name
  • Other names used (if applicable)
  • Address (Street number and name, Apartment number, City or Town, State, ZIP Code)
  • Date of birth
  • U.S. Social Security number (optional unless the employer participates in E-Verify)
  • Email address and telephone number (optional)
  • Citizenship or immigration status attestation by selecting one of the following:
    • U.S. citizen
    • Noncitizen national of the U.S.
    • Lawful permanent resident
    • An alien authorized to work

Section 2: Employer or authorized representative review and verification

• Who completes it: The employer or an authorized representative.
• What it includes:
  • Document title
  • Issuing authority
  • Document number
  • Expiration date (if applicable)
  • The employer must physically examine the documentation presented by the employee and sign and date the section.

Section 3: Reverification and rehire

• Who completes it: The employer (when necessary).
• What it includes:
  • Reverification of employment authorization (for employees whose employment authorization has expired)
  • Updating information for rehires

Acceptable identity and employment authorization documents

Employees must present original documents that establish both identity and employment authorization. The documents are divided into three lists:

• List A: Documents that establish both identity and employment authorization
• List B: Documents that establish identity only
• List C: Documents that establish employment authorization only

Examples of acceptable documents

List A (Identity and Employment Authorization)

• U.S. Passport or U.S. Passport Card
• Permanent Resident Card or Alien Registration Receipt Card (Form I-551)
• Employment Authorization Document (Card) that contains a photograph (Form I-766)
• Passport from the Federated States of Micronesia (FSM) or the Republic of the Marshall Islands (RMI) with Form I-94 or Form I-94A indicating nonimmigrant admission under the Compact of Free Association Between the U.S. and the FSM or RMI

List B (Identity Only)

• Driver's license or ID card issued by a state or outlying possession of the U.S., provided it contains a photograph or information such as name, date of birth, gender, height, eye color, and address
• ID card issued by federal, state, or local government agencies or entities, provided it contains a photograph or information such as name, date of birth, gender, height, eye color, and address
• School ID card with a photograph
• Voter's registration card
• U.S. military card or draft record

List C (Employment Authorization Only)

• Social Security Account Number card (unless it specifies that the card is not valid for employment)
• Certification of Birth Abroad issued by the U.S. Department of State (Form FS-545)
• Certification of Report of Birth issued by the U.S. Department of State (Form DS-1350)
• Original or certified copy of a birth certificate issued by a state, county, municipal authority, or outlying possession of the U.S. bearing an official seal

Acceptable receipts

Employees may present certain receipts in place of a List A, B, or C document. Acceptable receipts include:

• A receipt for the application to replace a lost, stolen, or damaged document (must be replaced within 90 days)
• The arrival portion of Form I-94/I-94A with a temporary I-551 stamp and a photograph of the individual
• The departure portion of Form I-94/I-94A with an unexpired refugee admission stamp

E-Verify

E-Verify is an internet-based system that allows businesses to determine the eligibility of their employees to work in the United States. It compares information from an employee's Form I-9 to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility.

• Employers participating in E-Verify: Must create a case for each new hire within three business days after the employee starts work.
• Employee responsibilities: Employees may need to provide additional information or documents if a mismatch (Tentative Nonconfirmation) is found during the verification process.

Important notes

• Employees must complete and sign Section 1 of Form I-9 no later than the first day of employment.
• Employers must complete Section 2 by examining evidence of identity and employment authorization within three business days of the employee's first day of employment.
• Reverification (Section 3) is required only if the employee's employment authorization or documentation has expired.

Form W-2

Form W-2, officially titled "Wage and Tax Statement," is a form used in the United States to report wages paid to employees and the taxes withheld from them. It is an essential document for both employers and employees, primarily used for tax filing purposes.

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Key Components of Form W-2

• Employee's Personal Information: Name, address, and Social Security number.
• Employer's Information: Employer's name, address, and Employer Identification Number (EIN).
• Wages, Tips, and other compensation: Total amount of taxable wages, tips, and other compensation paid to the employee.
• Federal income tax withheld: Total amount of federal income tax withheld from the employee's pay.
• Social Security wages and tax withheld: Amount of wages subject to Social Security tax and the corresponding tax withheld.
• Medicare wages and tax withheld: Amount of wages subject to Medicare tax and the corresponding tax withheld.
• State and local tax information: Wages subject to state and local taxes and the corresponding taxes withheld.

Distribution and filing

1. Employer responsibilities:
   • Provide copies to employees: Employers must provide employees with a copy of their W-2 by January 31 of the following year. This gives employees enough time to use the information for their personal tax returns.
   • Submit to the Social Security Administration (SSA): Employers must also file Form W-2 with the SSA by the end of January. The SSA uses this information to calculate Social Security benefits.
   • State and Local Authorities: Depending on state and local regulations, employers might also need to file Form W-2 with appropriate state and local tax authorities.
2. Employee responsibilities:
   • Use for tax filing: Employees use the information on Form W-2 to file their federal, state, and local tax returns. It provides necessary information about their earnings and the taxes that have been withheld.
   • Retain for records: Employees should keep their W-2 forms for their records, as they may need them for future reference, especially if questions about tax filings arise.

Importance of Form W-2

• Tax Filing: It is essential for employees to accurately complete their tax returns.
• Verification: The IRS and other tax authorities use it to verify income and withholdings reported by employees.
• Benefits Calculation: The SSA uses the information from Form W-2 to calculate Social Security benefits.

Deadlines

• For Employers: January 31 (to employees and the SSA).
• For Employees: Use by April 15 (tax filing deadline for most individuals).

Form W-4

Form W-4, officially titled "Employee's Withholding Certificate," is used by employees in the United States to inform their employer of their tax situation. This form determines the amount of federal income tax to withhold from an employee's paycheck.

Key components of form W-4

1. Personal information:
   • Full name
   • Social Security number
   • Address
   • Filing status (Single, Married filing jointly, Head of household, etc.)
2. Multiple jobs or spouse works:
   • Employees with multiple jobs or a working spouse can adjust their withholdings accordingly. This section helps to ensure the correct amount of tax is withheld when multiple sources of income are present.
3. Claim dependents:
   • Employees can claim dependents, which may reduce the amount of tax withheld from their paychecks. The form includes instructions on how to calculate the total amount for dependents.
4. Other adjustments:
   • Additional income (not from jobs): Employees can include other sources of income, such as interest, dividends, or retirement income, to increase the withholding amount.
   • Deductions: If employees expect to claim deductions other than the standard deduction, they can account for these to reduce their withholding.
   • Extra withholding: Employees can specify an additional amount to be withheld from each paycheck if they anticipate owing more taxes.
5. Sign and date:
   • The form must be signed and dated by the employee to be valid.

Purpose of Form W-4

• Accurate tax withholding: Helps employers withhold the correct amount of federal income tax from employees' paychecks. Accurate withholding helps prevent employees from owing a large amount of tax when filing their annual tax returns.
• Tax planning: Allows employees to adjust their withholding to better match their expected tax liability, aiding in financial planning throughout the year.

When to complete or update form W-4

• New employment: When starting a new job, employees must complete Form W-4 for their employer.
• Life changes: Employees should update their Form W-4 if they experience major life changes that could affect their tax situation, such as marriage, divorce, the birth of a child, or a significant change in income.
• Tax adjustments: If employees find that too much or too little tax is being withheld, they can submit a new Form W-4 to their employer to adjust the withholding amount.

State new hire tax forms

While not required in every state, some states require workers to complete a state-specific W-4 form. 

At the time of writing, 41 states require a state W-4 form. If you're hiring remote employees, it's important to understand and comply with their local tax guidelines.

State new hire reporting

Some states have new hire reporting requirements that mandate employers to report information about newly hired or rehired employees to a designated state agency. 

While specific requirements can vary by state, here are some common elements and examples:

California

• Reporting deadline: Within 20 days of the employee's first day of work.
• Information required: Employee's name, address, Social Security number, and start date; employer's name, address, and FEIN.
• Reporting methods: Online through the Employment Development Department (EDD) website, mail, or fax.
• Penalties: Up to $24 for each failure to report a new hire, and up to $490 for conspiring with an employee to fail to report.

Texas

• Reporting deadline: Within 20 calendar days of the hire date.
• Information required: Employee's name, address, Social Security number, and start date; employer's name, address, and FEIN.
• Reporting methods: Online through the Texas Attorney General's New Hire Reporting Program, mail, fax, or EDI.
• Penalties: Fines up to $25 for each new hire not reported, and up to $500 for conspiring with an employee to fail to report.

New York

• Reporting deadline: Within 20 days of the employee's start date.
• Information required: Employee's name, address, Social Security number, and start date; employer's name, address, and FEIN.
• Reporting methods: Online through the New York State Department of Taxation and Finance, mail, or fax.
• Penalties: Fines up to $20 for each failure to report a new hire.

Florida

• Reporting deadline: Within 20 days of the employee's first day of work.
• Information required: Employee's name, address, Social Security number, and start date; employer's name, address, and FEIN.
• Reporting methods: Online through the Florida Department of Revenue, mail, or fax.
• Penalties: Fines for non-compliance are determined by the Florida Department of Revenue.

Illinois

• Reporting deadline: Within 20 days of hiring or rehiring an employee.
• Information required: Employee's name, address, Social Security number, and start date; employer's name, address, and FEIN.
• Reporting methods: Online through the Illinois Department of Employment Security, mail, or fax.
• Penalties: $15 per employee for failure to report, and $500 if failure is due to a conspiracy between the employer and employee.

Standard But Not Legally Required New Hire Forms

As well as mandatory federal and state forms, you’ll likely want the new hire to review and sign.

Offer letter

An offer letter is a formal document from an employer to a potential employee outlining the terms of employment, including job title, salary, and start date, and confirming the job offer.

Employment agreement

An employment agreement is a legally binding contract between an employer and employee that specifies the terms and conditions of employment, including duties, compensation, and duration of employment.

Employee handbook acknowledgment

A form signed by employees to confirm they have received, read, and understood the company's employee handbook and agree to comply with its policies.

Direct deposit authorization

A direct deposit authorization is a form completed by an employee to give consent for their employer to deposit their paycheck directly into their bank account. You’ll also need to collect their bank details.

Emergency contact information

Data provided by an employee that includes names and contact details of individuals to be contacted in case of a workplace emergency.

Policy acknowledgements

Policy acknowledgments are forms that employees sign to confirm they have read, understood, and agree to abide by specific company policies.

Benefits forms

Documents that employees complete to enroll in company-provided benefits such as health insurance, retirement plans, and other employee benefits programs. This is made a lot easier with benefits administration software.

New hire questionnaire

A new hire questionnaire is a form that gathers important information from new employees, such as personal details, previous work experience, and other relevant data needed for their employment records. 

You can also use this as an opportunity to gather some fun details like food preferences that can help personalize your new hire’s onboarding plan.

Information You’ll Need

To summarize a bit, when hiring someone new, this is the information the IRS says you need to secure for your records and forms that you must complete:

Employee’s eligibility to work in the United States

In accordance with IRS guidelines, every employer must verify the eligibility of their employees to work in the United States using Form I-9, Employment Eligibility Verification. This form requires employees to present acceptable documents that establish both their identity and employment authorization. 

Employers must review and record these documents to ensure compliance with federal immigration laws. Failure to comply with these requirements can result in penalties and legal consequences for the employer.

Employee's Social Security Number (SSN)

The IRS mandates that employers must obtain a valid Social Security Number (SSN) from each employee for tax reporting purposes. 

The SSN is crucial for accurately reporting wages, calculating Social Security and Medicare taxes, and ensuring that the employee's earnings are correctly credited to their Social Security record. 

Employers are responsible for collecting, verifying, and using the SSN on payroll records, tax filings, and when issuing W-2 forms at the end of the year.

Employee’s withholding

Employees must complete Form W-4, Employee's Withholding Certificate, to indicate their tax situation to the employer, which includes information such as filing status, number of dependents, and any additional tax adjustments. 

This form is essential for determining the correct amount of federal income tax to be withheld from the employee's paycheck.

New Hire Paperwork Best Practices 

So, a fair bit of i-dotting and t-crossing then! However, it's totally manageble with a bit of preparation and by following these best practices:

Add to your onboarding checklist

Develop a standardized onboarding checklist to help ensure all required paperwork is completed and collected. This helps maintain consistency and ensures nothing is overlooked. 

Use digital tools

Utilize electronic forms and digital signatures where possible to streamline the process, reduce errors, and make it easier for new hires to complete paperwork remotely. Most onboarding software solutions will include this.

Get regular compliance updates and advice

As part of your compliance rigor, keep abreast of federal and state regulations by joining human resource networks such as SHRM. Your legal counsel can also help.

For example: Globalization Partners services make even global talent onboarding a smooth and compliant process for everyone.

Get out ahead of it

Aim to get all paperwork completed on the first day or, as much as possible, during the preboarding phase (the time between someone accepting the offer and their first day).

Hold orientation sessions

Conduct an orientation session to review important policies, benefits, and procedures. This allows new hires to ask questions and clarifies any uncertainties regarding the paperwork.

Create a welcome package

Put together a welcome package that includes the employee handbook, company policies, a list of key contacts, and any other relevant information to help new hires acclimate to their new role.

Review employee data semi-regularly

Set aside time one or twice a year to review employee data and look for discrepancies e.g. people that no longer work at the org or names you don’t recognize.

Most modern HRMS solutions have self-service portals where workers can access and update their info.

How An Employer Of Record Helps With New Hire Paperwork

An EOR acts as the legal employer for the employee, even though the employee works at another company. The EOR will take on responsibilities such as payroll, tax compliance, benefits administration, and legal compliance for employees (more details in our article what is an EOR?).

This arrangement is particularly common in situations where a company wants to hire international employees in a location where they don't have a legal entity.

Here are some key aspects of how an EOR handles new hire paperwork:

• Employment contracts and agreements: The EOR is responsible for drafting and managing employment contracts, ensuring that they comply with local labor laws and regulations to avoid employee misclassification issues.
• Tax documentation: They handle necessary tax forms and documentation, ensuring that the employee is correctly set up for tax purposes in their jurisdiction.
• Benefits enrollment: The EOR manages the enrollment of employees in various benefits programs, if applicable, such as health insurance, retirement plans, and other perks.
• Compliance with local laws: An EOR ensures that all employment practices, including new hire paperwork, comply with local labor laws. This is especially important for companies hiring employees in different countries or regions.
• Onboarding process: They often facilitate the onboarding process, which includes not only the paperwork but also the introduction to company policies, procedures, and culture.
• Payroll setup: The EOR provider sets up payroll for new hires, ensuring that all relevant information is correctly processed for timely and accurate payment.
• Data privacy and security: Handling sensitive employee data requires adherence to data protection regulations, which the EOR manages as part of their responsibility.
• Visa and work permit processing: If the new hire requires a work visa or permit, the EOR can assist in obtaining and managing these documents.

How A Professional Employer Organization Helps With New Hire Paperwork

A Professional Employer Organization typically handles new hire paperwork as part of its services. A PEO enters into a co-employment arrangement with a company where it takes on many employer-related responsibilities and risks (more details in our article what is a PEO?).

Here's how a PEO typically deals with new hire paperwork:

• Employment contracts and agreements: PEO companies assist in creating and managing employment contracts that are compliant with local labor laws, ensuring all legal requirements are met.
• Tax form management: They handle critical tax-related documents, such as W-4 forms for tax withholdings in the United States, ensuring compliance with federal, state, and local tax regulations.
• Benefits administration: PEOs often manage enrollment in health insurance, retirement plans, and other employee benefits, handling all associated paperwork.
• Compliance with labor laws: Ensuring compliance with labor laws and regulations is a key part of a PEO's role, and this extends to the handling of new hire documentation.
• Onboarding process: PEOs typically facilitate the onboarding process, which includes the completion of necessary paperwork and orientation to company policies and culture.
• Payroll registration: They set up new employees in the payroll system, handling all aspects of payroll administration and ensuring accurate and timely payment.
• Data privacy and security: PEOs manage sensitive employee data, adhering to data protection laws and ensuring the security and confidentiality of personal information.
• Training and development programs: Some PEOs may also assist with setting up training and development programs for new hires, including the necessary documentation and tracking.

If you’re still not sure on the differences, check out our article to learn more about the difference between a PEO and EOR.

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FAQs

What is the deadline for submitting new hire paperwork?

How do we verify the documents presented for the I-9 form?

What should we do if an employee makes a mistake on their paperwork?

Does an independent contractor need to fill out a Form W-2?