Your Responsibilities as an Employer
When you hire your first employees, you have some responsibilities to that employee, and to all future employees, relating to compensation. These responsibilities are codified under federal laws:
- You must pay at least the minimum wage (unless the employee receives tips or is somehow not subject to minimum wage.
- Unless an employee is categorized as exempt (managerial, professional, and supervisory employees), you must pay overtime at 1 1/2 times hourly pay, for all hours worked over 40 in any week.
- Along with each paycheck, you must provide employees with a statement showing gross pay, deductions and withholding, and net pay for the pay period and the year to date.
- You must provide employees with a yearly statement of earnings, withholding, and deductions, no later than the end of January of the next year. This statement is a W-2 Statement of Earnings.
Some Additional Responsibilities to Employees