Welcome | Step One: Getting Started | Step Two: Operating a Business | Step Three: Business Plan

Step Two: Managing Employees — Federal Requirements

An important part of managing your employees will take place behind the scene. Make sure you take care of all tax and regulatory requirements related to your employees to keep the engine of your business humming. These requirements exist at the federal, state and local levels. It is very important to follow all laws regarding employees. A form is included at the end of this section to help you keep track of your decisions related to employees. Consult with an attorney, as needed.

• Employer Identification Number (EIN)
• Employee Eligibility Verification
• Required Posters

Employer Identification Number (EIN)

The Employer Identification Number, or EIN, identifies the business to the Internal Revenue Service and the Social Security Administration. It will appear on all business tax returns and all tax correspondence related to your business. Although sole proprietorships with no employees may not need an EIN, the State of North Carolina encourages all businesses to use one since the EIN is often used by state and local agencies as a means of cross-referencing businesses.

If you answer yes to any of the following questions, you will need an EIN:

• Do you have employees?
• Do you operate your business as a corporation or a partnership?
• Do you file any of these tax returns: Employment; Excise; or Alcohol, Tobacco and Firearms?
• Do you withhold taxes on income, other than wages, paid to a non-resident alien?
• Do you have a Keogh plan?
• Are you involved with any of the following types of organizations:
  • Trusts, except certain grantor-owned revocable trusts, IRAs, and Exempt Organization Business Income Tax Returns;
  • Estates;
  • Real estate mortgage investment conduits;
  • Non-profit organizations;
  • Farmers' cooperatives; or
  • Plan administrators.

To apply for an EIN, fill out IRS Form SS-4. You may access instructions for this form here. Application may be made by phone, fax, mail, or on-line. For more information on applying for the EIN, visit the IRS web site or you may reach them by phone at 1 (800) 829-1040.

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Employee Verification

The U.S. Department of Justice, Immigration and Naturalization Service requires all employers to complete an Employee Eligibility Verification Form (Form I-9) for each employee hired. This form provides proof that the employee is eligible to work in the United States . With increased fears about terrorism, this form has become more important in recent months.

To access a copy of the Form I-9 in PDF format, click here. If you do not have access to the Internet, you may call 1 (800) 870-3676 to have the form mailed to you.

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Required Posters

Federal regulations require that companies with employees must post certain posters in a conspicuous place so that their employees may read them. Four required posters are listed below. For additional information about these posters or to obtain information about other posters that certain employers may be required to display, visit the Department of Labor web site.

The Small Business Interactive CD includes approved copies of the following posters that you can print out and use in your business. Please contact Coastal Carolina Community College to obtain your CD copy.

Fair Labor Standards Act (FLSA) Minimum Wage Poster

Family and Medical Leave Act (FMLA) Poster

Equal Employment Opportunity (EEO) Poster

Occupational Safety and Health Administration (OSHA) Poster

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