Is your Georgia business generating enough revenue to support hiring new employees? If so, congratulations! The hiring process and onboarding of new employees can be time-consuming and requires careful planning and preparation. After all, your business's success depends on your employees' skills and talents.
Before hiring a new employee or independent contractor, there are several steps you should take to ensure that your business complies with state and federal laws concerning taxes, payroll, and legal compliance. This guide will walk you through the basics of hiring and onboarding employees in Georgia, answer all your burning FAQs, and help you understand what is required of you as an employer.
Ready? Let's get you set up to hire your GA team member!
Set Up Your Business
Federal Employer Identification Number (EIN)
If you plan to be an employer in Georgia or any other state, you must register for a Federal Employer Identification Number, commonly called an EIN or FEIN. You can think of it as a Social Security Number for a business. It is assigned by the US Internal Revenue Service (IRS), and it is used to identify your business to the IRS and the state of Georgia.
To request an EIN, visit the IRS website and submit Form SS-4. Make sure to complete the application in one session, as there is no option to save or return to it at a later time. Sessions that are inactive for more than 15 minutes will expire.
Georgia State Tax ID
Every business operating and planning to make a profit in Georgia has to register with the Georgia Department of Revenue. Another important business tax registration requirement for any entity that conducts business within Georgia is the Georgia State Tax ID.
Your company will need a Georgia state tax ID number if you are selling taxable goods and services in the state, if you will owe state-level excise taxes, or if you will hire employees in Georgia.
It's important to note that Georgia businesses with employees are also required to register for a Georgia withholding tax ID. This ID is used to withhold state income tax from employee wages and report those withheld amounts to the state. Withholding tax ID registration does not require renewal and remains in effect as long as the business has employees whose wages are subject to Georgia income tax withholding.
To get a state tax ID number, your first step will be registering with the IRS to get a federal tax ID number; if you apply online, you should be able to get it in less than an hour. Once you've received your federal tax ID, you can fill out the Georgia state tax ID number application. To do so, visit the Georgia Tax Center site at www.gtc.dor.ga.gov. Click the link for "Register Your New Georgia Business" and follow the instructions to register an account for your business.
Finally, select "Sales and Use Tax" and provide the percentage of your revenue corresponding to the provided categories. If you have employees, you will also need to select "Withholding Tax" option and complete the registration process for that as well. Once you've completed the registration, you will receive a confirmation number. Once approved, the Georgia Department of Revenue will email you your Georgia sales and use tax ID number, informing you that your business registration is complete.
Register As An Employer With The State of Georgia
If you have not already done so, you must register as an employer with the State of Georgia. This involves signing up for an Unemployment Insurance account with the Department of Labor. Once successfully registered, you will have access to the Department of Labor's Employer Portal. The Employer Portal gives all Georgia employers access to self-service options with a single log-in for Unemployment Insurance tax-related services and resources.
For more details about setting up your business, EIN, and registering with the Georgia Secretary of State, visit our Georgia Payroll Tax Guide.
Obtain Workers' Compensation And Other Employment Coverages
Georgia requires most employers with three or more full-time, part-time or seasonal employees to have workers' compensation insurance. This insurance protects employees in the event of workplace injuries. If the business is incorporated or an LLC, the corporate officers or members are included in the three or more employee count regardless of whether they exempt themselves from coverage. Some exceptions to coverage requirements include railroad carriers, U.S. Government agencies, farm laborers, and domestic servants.
You can obtain workers' compensation insurance through a private insurance company or, in some states, through a state fund. In the State of Georgia, you can self-insure; however, this is only recommended if you are an experienced risk management professional with a high degree of business acumen.
CAVU's workers' compensation services can help you eliminate down payments for workers' compensation insurance and reduces the likelihood that audits will show you owe additional funds at the end of your policy date. To learn more about it, visit our workers’ compensation page.
Another insurance policy you will need if you are hiring employees in Georgia is Employment Practices Liability Insurance (EPLI). This type of insurance is designed to protect your business from many different types of employment-related claims, such as wrongful termination, employee harassment, and discrimination.
While the Georgia Department of Labor doesn't require EPLI coverage, it is a good idea to have this insurance in case of any employment-related lawsuits. It's a great way to get peace of mind and protect your business from financial risks.
Finally, consider purchasing a Business Owner's policy or, at least, a required general liability coverage to protect your business from claims of property damage or bodily injury made by a third party.
Enroll In Unemployment Insurance
As an employer in Georgia, you are required to pay unemployment insurance (UI) tax for your employees. The unemployment insurance program provides financial compensation to eligible workers who have lost their job through no fault of their own. Employers pay into this program through periodic payroll tax payments, and employees receive benefits when searching for new employment. In Georgia, state UI tax is administered by the Georgia Department of Labor.
To learn more about unemployment insurance tax and how to register for it, visit the Georgia Department of Labor website.
Now that your business is set up and you comply with the state's employment laws, it's time to hire employees. In addition to creating a job listing and recruiting candidates, you need to consider a few other things.
First, make sure you understand the different employee classifications available in Georgia, such as full-time and part-time, seasonal, or temporary. You will also need to consider the benefits you offer, including health care, retirement, vacation, and sick leave.
Finally, you will need to create an onboarding process for your new hires. This includes providing orientation materials, training on company policies and procedures, or setting up a system for employee performance reviews. From a payroll perspective, you will need to decide on a payroll schedule and ensure you comply with the Georgia Department of Labor's requirements for payroll processing.
To avoid potential hiring mistakes once you've identified the right candidate, let's look at the hiring process - one step at a time.
Check If The Employee Is Eligible To Work In The United States
The first step to hiring a new employee is to ensure they are legally eligible to work in the United States. You can do this by asking the candidate for valid forms of identification and proof of eligibility, such as a U.S. passport, an Employment Authorization Document (EAD), a Green Card, or other immigration documents.
In addition to confirming the candidate's eligibility, you must also give the employee a Form I-9 to fill out. The Form I-9 verifies the candidate's identity and eligibility to work in the U.S. If the employee is not a citizen or permanent resident of the United States, they must provide a valid work permit or other proof of eligibility to work in the US. Check out the U.S. Citizenship and Immigration Services website for more information on work visas.
In addition to the Form I-9, employers in Georgia with more than ten employees or employers whose business holds a qualifying public contract, which is a contract with a city, county, state, school board, etc., must register for and use the E-Verify system to confirm work eligibility.
The E-Verify system is an internet-based system that allows employers to verify the employment eligibility of newly hired individuals. By enrolling in E-Verify, employers can quickly and accurately confirm their employees' identity and employment eligibility.
For employers of more than ten full-time employees, E-Verify is required in Georgia to receive a business license or certain professional license, and failure to comply may result in a fine. Employers who do not fall into this category are encouraged, but not required, to use the E-Verify system.
The Georgia E-Verify law requires contractors and all sub-contractors on Georgia public contracts (contracts with a government agency) for the physical performance of services over $2,499.99 to enroll in E-Verify, regardless of the number of employees. A contractor or sub-contractor may be exempt from this requirement if the contractor or sub-contractor has no employees and does not hire nor intend to hire employees to complete any part of the public contract. To learn more about the Georgia E-Verify law and how to enroll in the system, visit the E-Verify website.
Get A Criminal Background Check
While the law does not require employers to conduct a criminal background check on every candidate, it is a good practice to do so, especially for positions with responsibility or access to sensitive information. A background check will help ensure your future employee has no red flags in their past, and we recommend running it for all new employees.
To do so, you will need to obtain background check consent from the applicant. This form authorizes the employer to run a criminal background check and outlines how the information will be used. After you receive the consent form, you can use an online service or contact the Georgia Bureau of Investigation (GBI) to request the background check. Once you have received the background check results (and you are satisfied with them), you can extend a written job offer to your new team member.
Onboard The New Employee And Collect the Required Documents
Once the new employee has accepted your job offer, you can move forward with the onboarding process and welcome them to the team. The onboarding process typically includes the following main steps:
- Providing the employee with their new hire paperwork
- Collecting required documents (e.g., tax forms, Form I-9, direct deposit information, etc.)
- Providing orientation materials and training on company policies and procedures
- Setting up payroll and benefits.
The first step is to provide your new hire with the necessary paperwork. This includes a job description, offer letter, salary, employee handbook, and any additional documents that will help them understand the job and your company. All newly hired employees must read and understand this paperwork before they actually start working.
Next, you will need to collect your employee's tax information and necessary documents and forms. This includes the employee's Social Security number and W-4 form. The W-4 form (Employee's Withholding Allowance Certificate) will help you calculate the employee's federal income tax withholding or the amount of money you need to deduct from their paychecks.
The more federal income tax withholding allowances an employee claims, the less tax will be withheld from their paycheck and vice versa. Employees can claim either "0" or "1" withholding allowances if they want the maximum amount of taxes withheld from their paycheck. They can also claim "exempt" status on the W-4 form if they do not wish any taxes withheld from their paycheck.
In addition, you will need to provide the employee with a few other forms, such as the already mentioned I-9 form, direct deposit information, a state G-4 form that determines their state income tax withholding, and a policy manual. The direct deposit form will allow you to deposit the employee's paycheck into their bank account. The policy manual will outline your company's policies and procedures.
Here is a list of forms and documents you may need to provide and collect (if applicable) from your new hire in the state of Georgia:
- A job offer letter with a job description, signed by the employee
- A background check consent form
- A W2 Tax Form
- The I-9 Form, for employment eligibility verification
- A Direct Deposit Authorization Form
- A Federal W-4 Form
- A State G-4 Form
In addition to these forms, depending on the type of business and the employee's position, you may need to provide the following forms:
- The Company Workers' Compensation Insurance Policy Forms
- The ACA acknowledgment
- The outside employment disclosure form, if your employee is working anywhere else
- The FLSA form
Finally, both the federal and Georgia governments have specific posters and notices that must be posted in the workplace, usually near the employee breakroom or the entrance of your office. Posting requirements vary by type and size of business and are available for free from the federal government or the state of Georgia.
Georgia New Hire Reporting
Effective October 1, 1998, state and federal laws require employers to report all newly hired and re-hired employees. For Georgia employers, these reports are sent to the Georgia New Hire Reporting Program. Employers are required to report all new hires within ten calendar days of their start date and must submit new hire reports for any employee that fills out a W-4 form.
Per the state of Georgia, the following information is required on New Hire Reports:
- Employer's FEIN
- Employer's company name - a name associated with the FEIN
- Employer's address - address associated with the FEIN
- Employee's Social Security number
- Employee's name (specify first, middle, and last)
- Employee's home address
- Employee's date of birth
- Date of hire (the employee's first day of work for pay)
- Employee's medical insurance availability
- Employee's state of hire.
To report new hires in the state of Georgia, employers using a payroll or accounting service can generally have their reports electronically sent to the reporting center as a part of their payroll processing. For employers that do not use a payroll service, reports can be submitted online from Georgia New Hire Reporting Center's online portal.
Set up payroll
Now that you have all the necessary forms and information from your new hire, it is time to set up payroll.
To do this, you will need to provide your employee's information to your payroll provider. This includes basic information like name, address, Social Security number, bank account information (if you're using direct deposit), and start date. Finally, you will need to withhold taxes from the employee's paycheck. The amount of taxes you withhold will depend on the information provided to you on their W-4 and G-4 forms.
Federal income tax, FICA (Social Security and Medicare), and any other taxes required by the state of Georgia must be withheld from each employee's paycheck. The amount of tax to withhold from each employee is based on the number of allowances they claim, as well as their income.
Finally, you need to choose how often you will pay your employees. The most common options are weekly, bi-weekly, semi-monthly, or monthly. For hourly and salary non-exempt employees, you are also required to collect, review, and approve timesheets.
To finally pay your new employee, you have to calculate their payroll. To do so, you will need to:
- Gather timesheets
- Calculate hours worked
- Calculate gross pay
- Determine deductions
- Calculate net pay
- Distribute checks or direct deposits
The first step is to gather all timesheets from your employees. These should include the hours worked and any overtime or other pay they earned throughout the pay period. If you are using an electronic system, you can generally pull up these timesheets automatically.
Once you have all the information from your employees’ timesheets, you can calculate the total time worked for the period for each employee. The exact process will depend on whether an employee is salaried or paid hourly, as well as if they are non-exempt or exempt. Check out our detailed Georgia Payroll Tax Guide to learn more about this.
After calculating the hours worked, you can now move on to calculating the amount of gross pay for each employee. Gross pay is the total amount of money an employee has earned before deductions are taken out. To sum it up for hourly employees, multiply the number of hours worked by the hourly rate. For salary employees, gross pay is simply the salary amount.
Next, calculate any deductions that need to be taken from the gross pay. This includes taxes, insurance premiums, 401k contributions, and more. After all deductions are taken out, the remaining amount is the employee's net pay. This money will be distributed to the employee via check or direct deposit.
Finally, you will need to distribute the payroll checks or direct deposits to your employees. If you are using direct deposit, you will simply need to provide the employee's bank account information to your payroll provider. If you are using paper checks, you will need to print them and distribute them to the employees.
Document and store payroll records
In addition to paying your employees, you must keep accurate and complete payroll records. This includes all timesheets and documents related to hiring, firing, pay changes, and tax withholdings. It is essential to keep these documents safe, as the IRS or other governmental agencies may request them.
The following records should be stored for at least four years for each employee:
- Social Security number
- Employee W-4 and G-4 forms
- Federal and state income tax withholdings
- Social Security and Medicare tax withholdings
- Any other deductions, such as health insurance or retirement plans
- Payroll records, including timesheets and pay stubs
- Payroll tax returns
- Records of wages paid to each employee
You will also need to keep records of your company's payroll taxes. This includes federal and state income tax, Social Security tax, and Medicare tax.
By January 31 of each year, employers must issue to employees and file W-2s for the previous year. For employees, you should use W-2 forms, and for contractors, 1099 forms.
In Georgia, you are required to keep payroll records on file for at least four years. You can store them digitally, using a payroll software system, or in paper form, as long as they are easily accessible and up to date.
Hiring and onboarding employees can be a stressful process. However, by following the steps outlined in this guide, you can ensure that your business complies with all state and federal laws and that your employees get paid properly and on time.
Labor laws change from time to time, so it's important to stay up to date on any changes that could affect your business. Combining software and concierge services, CAVU's solution streamlines the hiring and payroll processes.
Led by experts on all local, state, and federal policies and regulations, CAVU can help you manage every part of your operation, including talent management, payroll, tax credits, and more.
By outsourcing your payroll and HR needs to CAVU, you can reduce and simplify your involvement in payroll administration and execution and streamline how you evaluate, hire, onboard, and manage employees.
Additionally, CAVU HCM provides its clients with direct access to federal and state laws regarding hiring, wages, paid and unpaid time off, medical leave, and more.
To learn more about CAVU HCM, click here.