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Five Critical HR To-Dos for Your New U.S. Company

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Five Critical HR To-Dos for Your New U.S. Company

The United States operates under a complex framework of employment laws spanning federal, state, and local levels. Forming your LLC or C-Corp establishes your legal entity, but it doesn't automatically grant you the authorization to hire employees or commence operations. In reality, the next and most critical phase is just beginning—building a compliant and scalable human resources system from the ground up. Proactive HR setup isn't just about checking boxes; it's about protecting corporate assets, building a reputable brand, and creating a productive environment where your business can thrive. This article will introduce five non-negotiable HR priorities to help you lay a solid foundation for your U.S. team.

Obtain Your EIN and Set Up State Tax Accounts

Before initiating recruitment, companies must first obtain the official identification required to act as an employer. The Employer Identification Number serves as a "Social Security number" for your business and is mandatory for filing taxes with the Internal Revenue Service (IRS), submitting documents, and hiring employees. Additionally, nearly every state requires businesses to register for specific tax accounts to handle unemployment insurance and income tax withholding. Key implementation steps include:

(1)	Apply for an EIN This is a process done directly through the official IRS website.
(2)	Complete State-Level Agency Registration Registration with the state's revenue department and labor department is mandatory, often involving the setup of a State Unemployment Tax Act (SUTA) account.
(3)	Secure Workers' Compensation Insurance Legislation in the vast majority of states requires employers to carry workers' compensation insurance to cover injuries or illnesses related to employment.

A common pitfall to avoid: Never assume that obtaining an EIN is sufficient. Neglecting state-level registrations will lead to administrative penalties and render you unable to process payroll legally.

Correctly Classify Your Workers

This is one of the most common and costly compliance pitfalls for new businesses. The distinction between an employee and an independent contractor is strict and non-negotiable.

Misclassifying a worker who meets the criteria of an employee as an independent contractor (reported on Form 1099-NEC) exposes the company to risks including back taxes, administrative fines, and unpaid benefits. The IRS and state regulatory authorities maintain stringent audits in this area. The classification is based on a three-part test:

(1)	Behavioral Control Do you control what the worker does and how they do it? If you set their schedule, provide training, and dictate processes, they are likely an employee.
(2)	Financial Control Does the worker have a significant investment in their equipment? Can they realize a profit or loss? Do they market their services to other clients? If not, they lean towards employee status.
(3)	Relationship Nature Is the work performed ongoing and integral to the business core? Does the company provide benefits? A permanent, essential work relationship typically indicates an employee status.

When in doubt, prioritize classifying the worker as an employee (reported on Form W-2). The cost of compliance is far lower than the cost of reclassification.

Establish Clear Employment Contracts & Policies

In the U.S. legal environment, verbal agreements are far from sufficient to govern employment relationships. Clear, written documents not only set clear expectations for both parties but are also crucial for protecting the company and its team.

U.S. employment law is highly state-specific. A policy that works in Texas may be illegal in California. All documents must be tailored to the company's state of registration and specific industry. Essential documents to prepare include:

(1)

Offer Letter & Employment Agreement

This should outline the job title, responsibilities, compensation (salary/hourly, pay frequency), benefits, and any confidentiality or intellectual property clauses.

(2)

Employee Handbook

Serving as the "constitution" of the company, this handbook needs to clearly articulate policies on anti-discrimination and anti-harassment, paid time off (PTO), sick leave rules, work schedules, remote work policies, and technology usage guidelines.

A well-drafted handbook manages employee expectations, promotes a positive culture, and serves as your first line of defense in disputes.

Set Up a Compliant Payroll System

Manually calculating payroll is entirely unfeasible in the United States. The complexity of federal, state, and local tax withholdings makes a dedicated system mandatory. The risks of a "DIY" payroll approach lie in the inevitability of errors, which can lead to incorrect tax filings, penalties from the IRS, and employee dissatisfaction. Key implementation points include:

(1)	Choose a Professional Provider Select a reputable payroll service like Gusto, ADP, or Paychex. These platforms automate calculations, tax filings, and payments.
(2)	Collect Employee Documents Each employee must complete a Form W-4 (for federal income tax withholding) and a Form I-9 (to verify employment eligibility).
(3)	Set a Pay Schedule Establish a consistent pay period (bi-weekly/semi-monthly) and choose a payment method (direct deposit/pay card).

Please remember that:

(1)	Adhere to your state's minimum wage and overtime laws.
(2)	Timely deposit all withheld taxes with the appropriate agencies.
(3)	File quarterly and annual payroll tax returns.

Design a Standardized Onboarding Process

An employee's first impression sets the tone for their entire tenure. A disorganized onboarding experience leads to low engagement and high early turnover.

A structured onboarding process boosts productivity, fosters connection, and significantly increases the likelihood that a new hire will become a long-term, valuable team member. Building an effective onboarding flow:

(1)	Pre-Boarding (Before Day 1) Send the official offer letter, complete background checks, and set up technology and system access.
(2)	Day One Ensure all legal forms (I-9, W-4) are completed properly. Provide a warm welcome, introduce the team, and review the company mission and handbook.
(3)	First 90 Days Schedule regular check-ins, provide necessary training, and set clear 30/60/90-day goals to guide their success.

Please note that form I-9 must be completed within 3 business days of the employee's start date. Failure to properly complete and retain this form can result in substantial fines.

Reference:
https://edd.ca.gov/en/newsroom/benefitting-californians/2025/edd-in-the-community/
https://blog.dol.gov/
https://www.ssa.gov/

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
Email: info@kaizencpa.com
Tel: +852 2341 1444
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Five Critical HR To-Dos for Your New U.S. Company

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