Employees & Human Resources

Before hiring any employees it’s important to make sure you have the basics in place!

• On the Business Registration & Taxes page you can find information about registering your business with the State of Ohio and ensuring compliance with federal, state, and local taxes for small businesses.
• On the Following the Law page you can find information about ensuring compliance with applicable federal, state, and local regulations, including workers’ compensation, unemployment taxes, reporting new hires, safety regulations, and verifying legal work status.
• It’s important to determine whether you’ll be hiring employees or contracting with independent contractors. The IRS - Understanding Employee vs. Contractor Designation guide provides information on proper classification of workers and the tax implications for a small business.
• Consider consulting with a licensed attorney before proceeding. On the Professional Services page you will find resources and services related to legal assistance. The FindLaw - Employment Law and Human Resources overview helps small business owners make sense of federal, state, and local laws.

Important Federal Regulations

• Overview of Federal Labor Laws - The US Department of Labor - Major Laws of the Department of Labor provides high-level guidance on federal labor laws that may affect your small business.
• Federal Taxes - IRS - Understanding Employment Taxes provides an overview of federal employment taxes. All employers must deposit and report applicable employment taxes to the IRS, including Federal Income Tax, Social Security and Medicare Taxes, Additional Medicare Tax, and Federal Unemployment Tax. Self-employed individuals are liable for the Self Employment Tax. The IRS - Employer’s Tax Guide provides guidance on federal tax filing requirements that apply to small businesses. For more information please refer to the Business Registration & Taxes page.
• Workplace Safety - The Occupational Safety and Health Administration (OSHA) ensures safe and healthy working conditions through enforcing standards and providing training and education. OSHA - Small Business provides dedicated resources for small businesses, including on-site consultation and compliance guides. OSHA - Compliance Assistance Quick Start provides a step-by-step guide to identify which major OSHA requirements may apply to your business.
• Legal Work Status - E-Verify is a web-based system that allows employers to confirm the eligibility of their employees to legally work in the United States. E-Verify is a voluntary program, however, employers with federal contracts or subcontracts may be required to enroll in E-Verify as a condition of the contract. E-Verify maintains an E-Verify Employers provides detailed instructions on how to enroll and verify employees.
• Health Insurance - While not required, small employers (generally 1-50 employees) may be eligible to purchase coverage through the Small Business Health Options Program (SHOP), which can also allow you to claim a Small Business Health Care Tax Credit. For more information please refer to the Professional Services page.

State & Local Regulations

• Overview of State Labor Laws - The State of Ohio maintains a Labor Law guide and Labor Law FAQ page, which provides guidance on Ohio labor laws and links to the relevant passages of the Ohio Revised Code (ORC).
• State Taxes - Ohio businesses are responsible for remaining compliant with the Employer & School District Withholding Tax. You can find details on tax filing guidelines, school district tax rates, and due dates on the Ohio Department of Taxation website and the Employer & School District Withholding Tax - Frequently Asked Questions page. The Ohio Department of Taxation also has an online tool for employers called The Finder, which provides information on tax jurisdictions and tax rates for all addresses in Ohio, including for municipal tax income, school district income tax, and the sales & use tax. For more information please refer to the Business Registration & Taxes page.
• Workers’ Compensation - In general, Ohio employers with one or more employees must have workers’ compensation coverage. The Ohio Bureau of Workers’ Compensation (BWC) manages the workers’ compensation program. Employers must submit a completed application for Ohio Workers Compensation Coverage and the non-refundable application fee. The BWC maintains a Frequently Asked Questions for employers page with additional details.
• Unemployment Insurance - Most Ohio employers are liable to pay unemployment taxes and report wages paid to their employees. The Ohio Department of Jobs & Family Services (ODJFS) provides information on registering as an employer with ODJFS, a list of important forms, a Frequently Asked Questions page, and an Employer’s Guide(PDF, 547KB).
• Reporting New Hires - The State of Ohio requires all Ohio public, private, nonprofit, and government employers report their new hires within 20 days of their start date. This can be done by registering your business and completing a report with the Ohio New Hire Reporting Center.
• Local Income Tax - Most local jurisdictions will administer a local tax on businesses with employees working in that locality. Businesses working in that jurisdiction will have to withhold those local income taxes from their employees’ pay and ensure payment to the applicable municipality. Please check with the municipality or municipalities where your business will operate to ensure that your business is in full compliance with local income tax. If your business will be operating within the City of Columbus you can find relevant information on their website, including information for new employers, forms for employers, and additional forms for businesses.

This list of laws, regulations , and taxes can be overwhelming to a new business owner, but don’t worry, you don’t have to do it all on your own! In fact, many small businesses don’t just write a check to their employees every two weeks and then spend hours handling the administrative work in the background. There are many payroll services out there that will handle many of the above tasks, including sending (or direct depositing) employees their checks, withholding the correct taxes, submitting appropriate tax documentation to the local, state, and federal authorities, and more. Read the US Chamber of Commerce’s Choosing the Right Payroll Service for Your Business for more information.

Established businesses typically have a Human Resources department that handles a variety of issues that ensure smooth business operations, including the following:

• Recruiting, hiring, on-boarding, retaining, and terminating employees
• Payroll administration
• Employee benefits
• Compliance with labor laws and workplace rules/regulations
• Workplace dispute resolution

It may be helpful to review one or more online guides to building effective human resources capabilities into your small business:

• SBA Business Guide - Hire and Manage Employees (Federal Government) - Overview of hiring and paying employees, employee benefits, and labor laws
• Business.com - 9 HR Basics for Any Small Business (For-Profit) - Overview of human resource basics, including labor laws, payroll, workers’ compensation, employee benefits, recruiting, and terminations
• Entrepreneur.com - Human Resources (For-Profit) - Overview of options for outsourcing human resources
• Entrepreneur.com - Hiring Your First Employee (For-Profit) - Tips for what you should consider as you hire your first employee
• Entrepreneur.com - Hiring and Orienting a New Employee (For-Profit) - Walks through the process of hiring and orienting a new employee
• Farm Commons - Workers (Nonprofit) - Offers free resources for farmers on wage and insurance obligations, establishing an internship program, and assistance navigating employment laws
• FindLaw - Employment Law and Human Resources (For-Profit) - Overview to help small business owners make sense of federal, state, and local regulations
• Fundera - HR for Small Business (For-Profit) - Overview of human resources, including compliance, documentation, recruitment and hiring, payroll and benefits, and more. Discusses pros and cons of doing human resources in house vs. outsourcing.
• SCORE - Human Resources (Nonprofit) - A collection of courses and blog posts related to human resources
• When I Work - The Complete Guide to HR for Small Businesses (For-Profit) - Overview of human resources for small businesses, including the basic processes that must be implemented
• Farm Answers - People (Public University) - Library of resources related to farm safety and managing employees