You’re Ready to Hire. Are You Legally Prepared?
Hiring your first employee is a major milestone—but it also brings a host of new legal obligations under Utah and federal law. From setting up payroll to complying with labor regulations, skipping a single step could expose your business to audits, penalties, or lawsuits.
This guide walks you through the essential legal requirements for Utah business owners before and after they bring on that first team member.
Step 1: Register for a Federal Employer Identification Number (EIN)
If you haven’t already, apply for an EIN through the IRS. You’ll need it to withhold taxes, open a payroll account, and report employment information.
Avoid this mistake: Using your personal Social Security number instead of registering your business for a proper EIN.
Step 2: Register with the Utah Department of Workforce Services
If you’re paying wages in Utah, you must register with the Utah Department of Workforce Services (DWS) to handle state unemployment insurance (SUTA) obligations. You can do this online at jobs.utah.gov.
Step 3: Understand Worker Classification
Make sure your new hire is properly classified as an employee—not an independent contractor. Misclassification is one of the most common and costly mistakes for small businesses.
Helpful resource: Check out our guide on Independent Contractor or Employee? Avoiding Worker Misclassification in Utah.
Step 4: Verify Employment Eligibility (Form I-9)
Within three business days of hire, you must complete a federal Form I-9 to verify the employee’s eligibility to work in the U.S. You are also required to use E-Verify if your business holds certain government contracts.
Step 5: Report the New Hire to the State
Utah law requires you to report all new hires within 20 days to the Utah New Hire Registry. This helps with child support enforcement and fraud prevention.
You can report online at jobs.utah.gov.
Step 6: Set Up Payroll Tax Withholding
You’ll need to withhold and remit:
- Federal income tax
- Social Security and Medicare taxes (FICA)
- Utah state income tax
- Unemployment insurance (UI)
Consult with a payroll provider or accountant to ensure proper withholding and filing. You’ll also need to issue regular pay stubs and provide a W-2 at year-end.
Step 7: Comply with Wage and Hour Laws
Utah employers must follow both federal and state wage laws. This includes:
- Paying at least the state minimum wage
- Complying with overtime rules under the Fair Labor Standards Act (FLSA)
- Keeping accurate time records
- Following Utah’s pay frequency rules
Step 8: Display Required Labor Law Posters
State and federal law require specific workplace notices to be posted where employees can see them. You can get these from the Utah Labor Commission or U.S. Department of Labor websites.
Step 9: Draft an Employee Offer Letter and Handbook
Even for one employee, it’s wise to document the terms of employment in writing. Include details about pay, job duties, at-will status, and company policies.
If you’re unclear on how to structure expectations or protect your business, we can help prepare compliant onboarding documents.
Final Thoughts: The First Hire Sets the Tone
Bringing on your first employee should be exciting—not legally risky. With the right planning, Utah business owners can start off strong and avoid common compliance traps.
If you’re preparing to hire—or already have—Duckworth Legal Group can help ensure your employment practices are sound and scalable.
Call (801) 882-7444 or email info@duckworthlegalgroup.com to schedule a consultation.