Swimming In A Sea Of Onboarding Paperwork? Your Life Raft Has Arrived

When it comes to new hire onboarding, there’s no sugarcoating it … there is a bit of paperwork you need to collect. This onboarding paperwork guides everything from withholding taxes to deducting for the cost of benefits, so you need everything in order before you can run payroll. 

If you’re swimming in a sea of onboarding paperwork, your life raft is organization. Read on to learn what kinds of paperwork to collect from employees. 

Onboarding Paperwork For New Employees

So, your candidate accepted the job. Hooray! Now it’s time to dive into the business of paper—paperwork, that is. 

Use this checklist to keep your onboarding forms—both electronic and paper—straight. 

Form I-9

Is your new hire authorized to work in the United States? That’s what Form I-9, Employment Eligibility Verification, is for. Form I-9 is a mandatory form employers must distribute to new hires before they can legally begin working. 

You and your new employee fill out Form I-9, which is divided into three sections. The employee fills out the first section, and you fill out the second section. Section 3 is only for reverification of employment eligibility and rehires. 

There’s something else you need to do when an employee is filling out Form I-9—collect identity and employment eligibility documents. Check out Form I-9 for a list of acceptable documents (e.g., passport). 

Form W-4

For accurate payroll, you must collect Form W-4, Employee’s Withholding Certificate, from new hires. Otherwise, how will you know how much to withhold for federal income tax? 

One more thing I want to mention: Be sure you’re using the new W-4 form (2020 and later versions) for new hires. Don’t use old copies of Form W-4 that you find in filing cabinets! 

Form W-4 asks employees for the following information:

• Name
• Social Security number (SSN)
• Marital status
• Tax withholding adjustments
• Tax exemption (if applicable)

And, keep in mind that Form W-4 isn’t just for new hires. Employees can fill out a new Form W-4 any time they need to adjust their tax withholding or marital status. 

Although you don’t need to file it with anyone, keep copies of Form W-4 in your records. The form guides federal income tax withholding. Not to mention, it gives you the information you need to fill out Form W-2 (e.g., SSN). 

State W-4 Forms

Form W-4 guides federal income tax withholding … but what about state income tax withholding? Cue state W-4 forms. 

Unless you’re in a state without state income taxes, you must withhold the tax from employee wages. Some states have their own version of the federal form while others use the federal form for state withholding purposes. 

If you’re in a state with state income tax, ask your new hire to fill out the state’s version of Form W-4. Use the completed form to set up payroll, and keep it in your records. 

Direct Deposit Forms

If your new hire wants to receive their wages through direct deposit, they need to give you their bank account information. 

Direct deposit forms ask for your employee’s:

• Name
• Account type
• Routing number
• Account number

Be sure to keep this sensitive information secure. Use it to set up direct deposit in your payroll software. 

Non-Disclosure Agreement 

Don’t want your employees talking about the ins and outs of your business? Then onboarding is the perfect time to give them a non-disclosure agreement (NDA) to sign. Non-disclosure agreements prevent employees from sharing listed confidential business information.

When putting together your NDA, you might consider getting a small business lawyer to help. Your non-disclosure agreement should outline what information is confidential, for how long, and what happens if the employee breaks the terms.

After collecting a signed NDA from your new hire, keep it securely in your records. 

Non-Compete Agreement

Instead of or in addition to an NDA, you might ask new hires to sign a non-compete agreement. In many states, a non-compete agreement is a contract that prevents an employee from taking a competing job for a certain period after leaving your business. That means an employee cannot work for a competitor or start a competing business during the outlined time frame. 

Emergency Contact Forms

Your team spends a lot of time in your business. Probably the majority of their time awake. So in that time, a lot can happen. That’s why you need to know who to call in case of an emergency. 

Ask your new hires to fill out a form reporting their emergency contact information. It’s a good rule of thumb to ask for more than one person’s information. I like to stick to three emergency contacts to ensure we have someone to reach out to in case of an emergency. 

After receiving the filled out and signed emergency contact form, file it away in a secure location. If you use payroll software with an employee portal, you can add it there so the employee can easily make changes to it (e.g., add new contacts and/or new phone numbers, etc.).

Employee Handbook Agreement 

Having a living handbook that you can update with new policies is one of the cornerstones of being an employer. You can outline your code of conduct, paid time off policies, pay frequency, benefits, etc. That way, employees know exactly what is expected of them and can refer to it at any time.

When you have an employee handbook (which I strongly, strongly, strongly recommend), you need a little form called an employee handbook agreement. When a new hire finishes reading the handbook, they sign the form. If you make changes to your handbook, you should also ask employees to read it over and sign a new form for your records.

Like all the other types of onboarding paperwork, keep the signed employee handbook agreement in your records.

Benefits Forms 

What kinds of benefits are you offering to your new hire? Retirement plan opportunities? Health insurance? FSA and HSA? Whatever the benefit, make sure you distribute forms to your employees for each.

Benefits forms give new hires information about the types of benefits you offer. On the form(s), employees can select if they want to participate, choose between plans, and select contribution amounts. 

After you collect completed and signed benefits forms from your new hires, use them to enroll the employee. And, correctly set up your payroll so you deduct the right contribution amounts from employee wages. 

Have Contractors? Here’s The Paperwork You Need

Not all the workers you hire have employee status. You might need an independent contractor to do something for your business. 

When you hire a contractor, you do not need to worry about onboarding paperwork like Form W-4 and benefits forms. Why? Because contractors are not employees. They don’t go on your payroll, and you don’t handle employment taxes or offer them employee benefits. 

With that being said, you do need to gather some paperwork when you hire an independent contractor. 

So, what do you need to collect from your new contractor? Form W-9, Request for Taxpayer Identification Number. Form W-9 gives you key information for your records, including the contractor’s:

• Name
• Business name
• Business entity 
• Taxpayer identification number (EIN or SSN)

Think of Form W-9 as the equivalent of Form W-4 but for contractors. Form W-9 gives you the information you need about the contractor to fill out Form 1099-NEC, which is how you report nonemployee compensation.